Inflation: Household consumption expenditure falls 4.07%

The continuous rise in the prices of goods and services as well as the challenging economic conditions have compelled households to reduce consumption expenditure by 4.07 per cent in 2022 as against an increase of 25.6 per cent in 2021.

The National Bureau of Statistics, NBS, disclosed this in the Gross Domestic Product (GDP) Report (Expenditure and Income approach) for the fourth quarter of 2022, Q4’22 report.

According to the NBS, “On an annual basis, real Household Consumption Expenditure in 2022 grew by -4.07 percent compared to 25.6 percent in 2021.”

However, household consumption expenditure in nominal terms rose YoY by 19.9 percent to N130 billion in 2022 from N108.5 billion in 2021.

According to the NBS, the first quarter of 2022 nominal households’ consumption expenditure stood at N29.3 billion from where it rose quarter-on-quarter (QoQ) by 2.8 percent to N30.13 billion in Q2’22.

The upward trend continued in Q3’22 where household consumption expenditure rose by 16 percent to N35.05 billion and up by 1.6 percent to N35.6 billion in Q4’22.

NBS said: “The observed trend since 2020 indicates that real household consumption expenditure declined in Q1 and Q2 of 2020, accounting for negative growth rates informed by the pandemic.

However, growth rates were recorded from Q3’20 as recovery from the pandemic was witnessed, while growth became negative in Q2 to Q4 2022 due to rising prices and challenging economic conditions.

“Household final consumption, in real terms, grew by -5.83 percent and -12.47 percent in Q3 and Q4 of 2022 respectively, on a yoY basis. However, these growth rates were lower compared to the growth rates of their corresponding quarters of 2021 which were 19.36 percent and 7.30 percent respectively.

“In Q3 and Q4 of 2022, growth rates were -5.83 percent and -12.47 percent, showing lower rates relative to the corresponding quarters of 2021.

“On a QoQ basis, real household consumption expenditure grew by 13.02% in Q3’22, and 2.6 percent in Q4’22.

“Household consumption accounted for 65.17 percent of real GDP at market prices in Q3 of 2022, and 60.25 percent in Q4’22.”