Nigeria’s inflation rate has dropped to 22.22% in June 2025, down from 22.97% in May, according to the National Bureau of Statistics (NBS). This 0.76% decrease indicates a slowdown in the pace of rising consumer prices. When compared to the same period last year, the headline inflation rate was 11.97% lower than the 34.19% recorded in June 2024, showing significant improvement in price stability.
On a month-on-month basis, prices rose by 1.68% in June, slightly higher than the 1.53% increase in May. This means the average price level increased at a faster rate in June compared to May. The month-on-month increase suggests that while the annual inflation rate is trending downwards, prices are still rising, albeit at a slower pace.
Food inflation stood at 21.97%, a significant decline of 18.93 percentage points from 40.87% in June 2024. The change in base year used for calculation contributed to this drop. However, on a month-on-month basis, food prices rose by 3.25% in June, up from 2.19% in May. This increase was driven by price increases in key food items like dried green peas, fresh pepper, and tomatoes.
When looking at urban and rural inflation rates, there are some notable differences. Urban inflation stood at 22.72% year-on-year, down from 36.55% in June 2024, with a month-on-month increase of 2.11%. Rural inflation, on the other hand, was 20.85% year-on-year, down from 32.09% in June 2024, with a month-on-month increase of 0.63%. These figures suggest that both urban and rural areas experienced significant declines in inflation rates compared to the same period last year.
Core inflation, which excludes volatile food and energy prices, stood at 22.76% year-on-year, down from 27.4% in June 2024. On a month-on-month basis, core inflation increased by 2.46%. This suggests that underlying inflationary pressures are still present in the economy.
Experts attribute the moderation in inflation to tighter monetary conditions, base effects, and relative foreign exchange stability. The Central Bank of Nigeria’s (CBN) efforts to stabilize the naira and manage liquidity in the system may have contributed to the decline in inflation. Additionally, the base effect, where the comparison to a high inflation rate in the previous year leads to a decrease in the current rate, may have played a role.
However, despite the decline in inflation, there are still concerns about the impact of insecurity in key food-producing areas and demand pressures on future inflation trends. Persistent insecurity in these areas could lead to supply chain disruptions, driving up prices and inflation. Furthermore, demand pressures, fueled by government spending and monetary policy, could also contribute to inflationary pressures.
In conclusion, the decline in Nigeria’s inflation rate is a welcome development, but the underlying inflationary pressures and potential risks to future inflation trends should not be ignored. Policymakers will need to continue monitoring the situation and making adjustments as necessary to ensure price stability and support economic growth.
