Nigeria’s inflation rate decreased to 23.18% in February 2025 from January’s 24.48%, attributed to lower fuel costs and a stable naira. Polyeconomic factors indicate potential future inflation increases, leading analysts to predict an average rate of 31% for the year. Meanwhile, interest rates were held at 27.50% by the CBN in response to current economic conditions.
In February 2025, Nigeria’s inflation rate demonstrated a decline for the first time following a rebase of the Consumer Price Index (CPI). The National Bureau of Statistics reported that the inflation rate was 23.18%, a reduction from January’s 24.48%. This decrease in inflation was attributed to lower petrol costs and improved stability of the naira.
The decline in diesel and petrol prices, influenced by increased production from Dangote Refinery, has contributed positively to controlling inflation. Diesel prices fell by 33% to ₦1,000 per liter, while petrol prices stabilized at approximately ₦800 per liter. Additionally, food inflation decreased to 23.51%, down from 24.08% in January.
Despite the recent improvements, analysts advise caution as they foresee potential inflation acceleration starting in April. They predict that the Central Bank of Nigeria (CBN) may struggle to meet its inflation targets due to ongoing global economic pressures. Basil Abia of Veriv Africa forecasts an average inflation rate of 31% for Nigeria in 2025, attributing this expectation to international economic influences rather than domestic policy failures.
During February’s Monetary Policy Committee (MPC) meeting, interest rates were maintained at 27.50%. The committee’s decision was based on the recent macroeconomic environment, particularly noting the stability of exchange rates and a gradual reduction in fuel prices, coupled with the recent CPI rebase.
To summarize, Nigeria’s inflation rate has experienced a notable decline in February 2025 due to lower fuel prices and a stable naira. However, analysts express concerns regarding future inflation, linking possible increases to global economic influences rather than domestic decisions. The CBN’s consistent interest rates reflect an intent to navigate these economic challenges carefully, while the outlook for the remainder of the year remains cautiously pessimistic.
Original Source: techcabal.com
