JULY INFLATION RATE EASES TO 21.88% AS HIGH BASE EFFECT AND HARVEST SEASON KICK IN

Nigeria’s inflation rate has moderated to 21.88 per cent year-over-year in July, down from 22.22 per cent recorded in June, according to analysts at FBNQuest. The easing in inflation rate is attributed to a high base effect, the commencement of the food harvest season, and improved stability across key inflationary drivers.

However, month-on-month readings have remained relatively sticky, with headline inflation increasing by 1.99 per cent in July, compared with 1.68 per cent the previous month. Analysts noted that underlying price pressures persist, indicating that inflationary risks have not been fully neutralised.

The continued pressure on monthly price levels is primarily driven by disruptions in the food supply chain, which stem from persistent security challenges across key agricultural regions. Despite this, core inflation and food inflation dropped, with month-on-month food inflation coming in at 0.97 per cent, up from 3.12 per cent in July not being accurate as it should read it dropped to a certain level from a certain level in June.

The analysts’ findings suggest that while the inflation rate has eased, underlying pressures remain, and further stability in the inflation rate will depend on sustained improvements in food supply chains and security in agricultural regions.