Dear subscriber,
The National Bureau of Statistics (NBS) is set to release its March inflation report (new basket and base year) on Tuesday, April 15. According to FDC’s Lagos market survey for March and regression analysis, the headline inflation rate is projected to decline slightly to 22.54% in March, down from 23.18% in February, representing a 0.64 percentage point change. The change reflects low consumer purchasing power, currency appreciation, and a reduction in petrol price.
Food inflation is projected to fall by 0.38% to 23.13% from 23.51%, but core inflation is projected to rise marginally by 0.07% to 23.08% from 23.01%.
The month-on-month inflation is expected to rise by 0.48% to 2.48% (annualized at 34.18%) in March, up from 2.04% in February, as a result of the surge in food prices driven by seasonal variations and supply chain factors.
A steep rise in the monthly inflation is a red flag for inflation expectations in the near term.
Month-on-month food inflation
Monthly food inflation is expected to rise marginally to 2.01% from 1.67%, driven by cost pressures associated with seasonality, fasting, and Easter coming.
Currency gains, price pains, and consumer restraint
Despite currency appreciation, consumers continue to feel the pinch as key commodity prices showed mixed trends in Q1’25. While prices of rice, beans, and palm oil fell, offering modest relief, staples like pepper and onions surged, straining household budgets. Meanwhile, 27.71% of items, including wheat flour and Irish potatoes, remained stable. These fluctuations underscore limited consumer relief in a volatile market where currency gains are offset by persistent price hikes.
Africa’s inflation cools, but underlying global price pressure persists
Africa’s inflation is projected to ease significantly in 2025, supporting a regional economic rebound, with Nigeria and South Africa reflecting divergent but stabilizing inflation trends. However, global risks such as rising U.S. tariffs, trade tensions, and a possible recession could undermine this progress by disrupting trade, raising import costs, and reducing external funding.
The FDC Think Tank shares its estimates for March inflation and the likely policy reaction in the download and link below.
Enjoy your read!
