Dear subscriber,

The NBS released the inflation numbers today, in line with our forecast, annual inflation declined by 0.75% to 22.22% in June from 22.97% in May. The decline in headline inflation offers a positive signal, but the uptick in other inflation indices suggests persistent underlying pressures. This divergence highlights that the disinflation trend may be fragile, driven more by base effects than broad-based price moderation.

Food inflation rose to 21.97% from 21.14%. The increase reflects seasonal supply constraints, flash floods in agricultural areas such as Mokwa, and a decline in food imports following the removal of temporary import concessions.

Core inflation also rose to 22.76% from 22.28%, reflecting a gradual increase in underlying price pressures. This increase was driven by transportation and logistics costs and an increase in consumer demand.

Similarly, month-on-month inflation rose to 1.68% from 1.53% in May.

Global Inflation Vs. Nigeria’s Inflation – Possible Rate Cut

In most advanced economies, inflation is beginning to rise again due to tariff hikes and market speculation, increasing the likelihood of higher global interest rates. In contrast, Nigeria has recorded a decline in inflation for three consecutive months, setting the stage for the MPC to consider a 25bps rate cut at its next meeting – the first in five years. Nevertheless, the interest rate differential will remain significantly high at 5.28%.

In the download and link below, the FDC Think Tank shares its thoughts on the impact of June’s inflation numbers on the economy.

Enjoy your read…