In February 2025, Nigeria’s inflation rate decreased to 23.18%, down from 24.48% in January, attributed to stable fuel prices and a rebase of the Consumer Price Index. Analysts predict inflation may rise again by April, forecasting an average annual rate of 31% due to global factors. The Monetary Policy Committee maintained interest rates at 27.50% in response to current economic conditions.
Nigeria experienced a decline in inflation for the first time in 2025, attributed to stabilized fuel prices and a steady naira. According to the National Bureau of Statistics, the Consumer Price Index (CPI) for February reflected an inflation rate of 23.18%, down from 24.48% in January 2025. This shift was largely influenced by decreased petrol costs and overall improvements in the economy.
The reduction in diesel and petrol prices, particularly with Dangote Refinery’s increased output, contributed significantly to this trend. Specifically, diesel prices fell by 33% to ₦1,000 per liter, while petrol prices remained stable at approximately ₦800 per liter. Food inflation also saw a decrease to 23.51% in February from January’s 24.08%.
However, analysts express caution, suggesting that Nigeria’s inflation may encounter challenges following the CPI rebase. Predictions indicate that inflation might accelerate as early as April, attributed to various global economic factors that may hinder the Central Bank of Nigeria (CBN) from achieving its targets.
Basil Abia, co-founder of Veriv Africa, stated, “My outlook for 2025 in Nigeria in spite of the rebasing is an average rate of 31% for the year. So, expect worse monthly numbers deep into 2025.” He emphasized that the primary influences on inflation may be external, drawing parallels to the economic impact of the pandemic in 2020.
In February, the Monetary Policy Committee (MPC) decided to maintain interest rates at 27.50%, considering current macroeconomic conditions such as exchange rate stability and the slow pace of fuel price increases. This decision reflects a cautious approach to the ongoing economic environment.
In summary, Nigeria’s inflation rate has decreased for the first time in 2025, largely due to stabilized fuel prices and a rebase of the Consumer Price Index. Notable reductions in diesel and petrol prices have contributed positively to the economy. However, analysts caution that inflation may rise again by April due to global economic pressures, forecasting an average rate of 31% for the year. The MPC has opted to hold interest rates steady, signaling careful monitoring of the economic landscape ahead.
Original Source: techcabal.com
