Nigeria inflation slows for first time in almost two years
TLDR
- Nigeria's annual inflation rate decreased in July for the first time in almost two years, dropping to 33.4% from 34.2% in June.
- This decline in inflation could impact the monetary policy of the Central Bank of Nigeria, potentially resulting in steady interest rates at the upcoming September meeting.
- Central Bank Governor Olayemi Cardoso has highlighted the focus on controlling inflation and suggested a possible decrease in interest rates if inflationary pressures continue to alleviate.
Nigeria’s annual inflation rate eased in July for the first time in nearly two years, driven by lower food prices, offering some relief to consumers grappling with rising living costs. The National Bureau of Statistics reported a consumer price increase of 33.4% for July, down from 34.2% in June.
This deceleration may influence the Central Bank of Nigeria's monetary policy, potentially leading to interest rates being held steady at their next meeting in September. Since 2022, borrowing costs have been raised by 15.25 percentage points to 26.75% to combat inflation.
Central Bank Governor Olayemi Cardoso has emphasized the commitment to curbing inflation and hinted that interest rates might decrease if inflationary pressures continue to ease.
Key Takeaways
Inflation in Nigeria is expected to continue cooling due to several measures, including a 180-day duty-free import window for wheat and corn, and the diminishing impact of last year's currency devaluation and partial fuel subsidy removal. These actions are part of the economic reforms introduced by President Bola Tinubu since taking office in May 2023, aimed at attracting investors, stabilizing the currency, and easing budgetary pressures. The anticipated slowdown in inflation is particularly significant for Nigerians who have been severely affected by rising costs. Earlier this month, widespread protests erupted in multiple cities, with demonstrators demanding the full reinstatement of fuel subsidies, reductions in electricity tariffs, and lower import duties. The protests, driven by frustrations over high inflation, resulted in at least 13 deaths following a crackdown by security forces.
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