Consumer Price Index Trends and Real Income Decline in Owerri: A Five-Year Analysis (2020 to 2024)

Consumer price inflation, as measured by the Consumer Price Index (CPI), is a fundamental economic indicator with direct welfare implications for households through its effect on real income and purchasing power. This study analyzes CPI trends and their implications for real income levels among households in Owerri, Imo State, over the five-year period from 2020 to 2024. The study is theoretically grounded in the Quantity Theory of Money, which establishes a direct relationship between money supply expansion and price level increases, providing a macroeconomic framework for understanding the inflationary dynamics observed in the study period. A descriptive longitudinal research design was adopted, utilizing secondary CPI and income data from the National Bureau of Statistics and the Central Bank of Nigeria, supplemented by primary survey data from 360 Owerri households selected through stratified random sampling. Statistical trend analysis and real income computation techniques were applied. Findings reveal that cumulative inflation in Owerri between 2020 and 2024 reached approximately 87 percent, driven primarily by food, transportation, and energy price surges. Real household income declined by an estimated 38 percent over the same period for non-indexed income earners, representing a severe erosion of consumer welfare. The study concludes that inflationary dynamics over the study period have produced a significant decline in the real living standards of Owerri households. It is recommended that income indexation mechanisms be explored and that federal monetary authorities adopt a more aggressive inflation-targeting framework to protect consumer welfare.

Keywords: Consumer price index, real income, inflation, Owerri, monetary policy