The National Bureau of Statistics (NBS) reported that after the Consumer Price Index (CPI) was rebased, Nigeria’s headline inflation rate decreased to 24.48% year over year in January 2025.
According to the report available to BrandSpur national news stories, the overall level of prices for goods and services has decreased from 34.80% in December 2024, when the old technique was used to compute this level.
Adeyemi Adeniran, the Federation’s Statistician-General, revealed this on Tuesday during a news conference in Abuja, stating that the updated inflation data better reflects the nation’s consumer purchasing trends and economic conditions.
The most recent NBS report states that rural inflation was 22.15% and urban inflation was 26.09%. The general price level of goods and services has decreased, according to the report, from 34.80% in December 2024, when the prior approach was used to compute this level.
According to the Statistician-General, the rebased Consumer Price Index (CPI) required changing the basket of goods and services used to assess inflation as well as amending the reference year. By making this change, inflation statistics are guaranteed to more accurately represent the state of the economy and consumer purchasing patterns.
In January 2025, the rebased food inflation index was 26.08% year-over-year, which was lower than the 39.84% it was in December 2024 using the previous approach. The food inflation index tracks changes in the cost of staple foods, which account for a sizeable amount of household expenses in Nigeria.
Similarly, the core inflation rate in January was 22.59% year over year, excluding volatile energy and agricultural commodity costs. The reduction in core inflation points to a reduction in inflationary pressures in the economy’s non-food sectors.
However, to keep inflation data current and representative of the state of the economy, the NBS stated that rebasing the CPI is an essential first step. Consumer behaviour changes, new market trends, and evolving spending habits over time were not sufficiently reflected in the prior base year.
While the decreased inflation rates provide some respite, economists contend that the cost of living is still high and that inflation’s effects are still being felt in several industries. Future inflation patterns will be largely determined by how well government policies—such as the Central Bank of Nigeria’s (CBN) monetary tightening and price-stabilizing fiscal interventions—work.
Although a decline in inflation may indicate greater economic stability, it does not always result in lower prices right once. Instead, because inflation is slowing down, prices are increasing more slowly, which helps firms and households that are having a hard time keeping up with rising expenses.
Inflationary movements in the upcoming months will be significantly influenced by the CBN’s fiscal policies, currency rate stability, and monetary policies. The way the government manages inflation control measures while maintaining steady economic growth will be actively watched by the business community.
