Figures released by the Bureau of Statistics office on Monday reveal Nigeria’s inflation rate decreased in August for the second consecutive month, falling to 32.15% year over year from 33.40% in July (NGCPIY=ECI), which opens a new tab. The most populous country in Africa saw a slowdown in headline consumer inflation in July for the first time in more than a year.
However, experts warn that August’s additional slowdown would only last temporarily in light of the two fuel price hikes this month, which have infuriated residents already facing the greatest cost of living crisis in a generation.
Prices have gone up as a result of President Bola Tinubu’s decisions to eliminate fuel subsidies that had been in place for decades, weaken the naira, and raise electricity costs. Encouraging economic growth and strengthening public finances are the goals of the changes.
Continuing, the central bank will probably take the most recent inflation figures into consideration when it makes its next interest rate announcement next week. The Central Bank of Nigeria (CBN) has hiked interest rates four times this year to curb inflation, and experts have speculated that the July increase may be the final one in the bank’s cycle of rate hikes.
Risks of inflation that linger include the possibility of more hikes in gas prices and floods in the northern part of the nation that have destroyed crops and raised food costs.
According to a research report written by Capital Economics’ Africa economist, David Omojomolo: “On the whole, disinflation should continue with the headline rate falling below 30% by year-end, but upside risks remain.”
He claimed that rising petrol prices could: “Slow the pace of the disinflation process,” and that interest rate reductions by the central bank wouldn’t begin until early next year.
August saw a decrease in food inflation (NGFINF=ECI) and opened a new tab, from 39.53% to 37.52%. In August, the category continued to be the primary cause of inflation, BrandSpur national news stories report.
