Nigeria’s inflation rate declined for the second straight month in February 2025, offering hope that the country’s persistent price pressures may have peaked and could continue to moderate in the coming months. According to the latest report released by the National Bureau of Statistics (NBS) on Monday, the headline inflation rate dropped to 23.18% in February, down from 24.48% in January 2025, reflecting a 1.30% decrease within the month.
Year-on-Year Comparison
On a year-on-year basis, the inflation rate showed a significant improvement, dropping by 8.52 percentage points from 31.70% recorded in February 2024. While the NBS noted that the figures were calculated using a different base year (November 2009 = 100), the decline indicates a notable slowdown in price increases compared to the same period last year.
Month-on-Month Inflation
The month-on-month inflation rate for February stood at 2.04%, reflecting the rate at which prices increased within the month. This figure, though still indicative of rising prices, suggests a gradual easing of inflationary pressures.
Key Insights from the NBS Report
The NBS highlighted the following key points in its report:
- The headline inflation rate in February 2025 eased to 23.18%, down from 24.48% in January 2025.
- The year-on-year inflation rate in February 2025 was 8.52% lower than the rate recorded in February 2024 (31.70%).
- The month-on-month inflation rate in February 2025 was 2.04, indicating a slower pace of price increases compared to previous months.
Context and Implications
The drop in inflation comes amid efforts by the Central Bank of Nigeria (CBN) to curb price surges through monetary tightening and foreign exchange (forex) stabilization policies. In 2024, Nigeria faced record-high inflation driven by factors such as currency depreciation, high transportation costs, and supply chain disruptions. While prices are still rising, the recent slowdown suggests that these pressures may be gradually easing.
Economic Outlook
The consecutive decline in inflation is a positive development for Nigeria’s economy, which has been grappling with high living costs and reduced purchasing power. If the trend continues, it could provide some relief to households and businesses, fostering economic stability and growth. However, challenges such as forex volatility, energy costs, and structural bottlenecks remain critical areas that need to be addressed to sustain this progress.
In Conclusion, the latest inflation figures offer a glimmer of hope for Nigeria’s economy, signaling that the worst of the price surges may be behind us. As the CBN and other stakeholders continue to implement measures to stabilize the economy, the focus will now shift to ensuring that these gains are sustained and that inflation continues on a downward trajectory in the months ahead.