Nigeria’s inflation rate decreased to 23.18% in February 2025, down from 24.48% in January, aided by lower petrol costs and a stable naira. Analysts predict possible acceleration in inflation beginning in April, with overarching global economic factors influencing outcomes. The MPC maintained interest rates at 27.50%.
In February 2025, Nigeria experienced a notable slowdown in its headline inflation, which recorded a rate of 23.18%, a decline from the 24.48% reported in January. This decrease followed a Consumer Price Index (CPI) rebase and was attributed to lower petrol costs and the stability of the naira. The National Bureau of Statistics released these figures, indicating a positive shift in the economic landscape.
The reduction in diesel and petrol prices, aided by increased output from Dangote Refinery, has played a significant role in tempering inflation. Diesel prices fell by 33%, reaching ₦1,000 per liter, while petrol prices remained stable at over ₦800 per liter. Furthermore, food inflation slightly decreased to 23.51% in February, down from 24.08% in January, indicating a gentle easing in consumer costs.
However, analysts suggest that Nigeria’s inflation may be at a turning point following the CPI rebasing, with expectations of acceleration commencing as early as April 2025. They caution that the Central Bank of Nigeria (CBN) may struggle to meet its inflation targets due to adverse global economic influences. Basil Abia, co-founder of Veriv Africa, forecasts an average inflation rate of 31% for 2025.
The Monetary Policy Committee (MPC) chose to maintain interest rates at 27.50% during its February meeting. This decision was based on a comprehensive assessment of recent macroeconomic conditions, including the stability of the exchange rate and the gradual decrease in fuel prices, alongside the implications of the CPI rebase.
In conclusion, Nigeria’s inflation has slowed for the first time in 2025 due to stable naira values and reduced fuel prices, signaling a temporary reprieve. Despite this improvement, analysts foresee potential challenges ahead, with inflation expected to rise again. The CBN’s capacity to manage this situation effectively will be crucial as economic conditions evolve. The MPC’s decision to maintain interest rates highlights the cautious approach to recent developments.
Original Source: techcabal.com
