Nigeria’s Inflation Rate Declines in July

By Chijioke Ohuocha

ABUJA (Reuters) – Nigeria’s headline inflation rate fell in July for the first time in over a year, dipping to 33.40% in annual terms from 34.19% in June, according to data from the statistics agency released on Thursday.

Analysts had suggested that June’s reading could mark the peak in inflation as the effects of currency devaluation begin to fade.

The slowdown in July will provide some relief to frustrated Nigerians, who protested this month over cost-of-living pressures and governance issues in Africa’s most populous nation.

Price increases have been fueled by President Bola Tinubu’s decision to remove a decades-old fuel subsidy, devalue the naira currency, and raise electricity tariffs. These reforms aim to boost economic growth and strengthen public finances but have led to soaring inflation, impacting people’s purchasing power.

The last month that annual inflation fell was December 2022.

The central bank has raised interest rates four times this year to manage inflation, but after the last hike in July, some analysts indicated that this could be the final increase in the bank’s current cycle.

The Central Bank of Nigeria’s next rate-setting meeting is scheduled for late September.

A report from the National Bureau of Statistics on Thursday indicated that food and non-alcoholic beverages continued to be the largest contributors to inflation in July.

Food inflation eased to 39.53% from 40.87% in June.