Nigeria’s month-on-month headline inflation rate has risen for the first time since February 2024, according to the latest Consumer Price Index (CPI) report for June 2024 released by the National Bureau of Statistics (NBS).
The CPI, which measures the average change over time in the prices of goods and services consumed by people for day-to-day living, recorded an increase from 2.14% in May 2024 to 2.31% in June 2024.
The NBS report read: “On a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, which was 0.17% higher than the rate recorded in May 2024 (2.14%). This means that in the month of June 2024, the rate of increase in the average price level is higher than the rate of increase in the average price level in May 2024.”
What the data is saying
- From January to June 2024, Nigeria experienced notable fluctuations in its inflation rates. January 2024 saw a monthly CPI of 2.64%, which sharply increased to 3.12% in February 2024, marking the highest inflation rate in this period.
- However, after February, the inflation rate began to decline steadily, reaching 3.02% in March, followed by a more significant drop to 2.29% in April, and further down to 2.14% in May.
- The rise in the monthly CPI to 2.31% in June 2024 indicates a reversal of the downward trend observed in the previous months.
It is interesting to note that the monthly rate recorded in June is higher than what was recorded in May and April 2024.
This uptick in inflation suggests that the cost of living is once again increasing for Nigerians, reflecting potential underlying economic pressures.
What you should know
This rise in month-on-month inflation follows a recent statement by the Central Bank of Nigeria (CBN) that its monetary policy tightening measures, implemented earlier this year in response to mounting inflationary pressures, are starting to yield the desired economic outcomes. The CBN pointed out that the month-on-month headline inflation, which decelerated for the third consecutive time in May 2024, highlights the effectiveness of these measures.
In the statement, the CBN emphasized that the monthly inflation trend validates the confidence of its Monetary Policy Committee (MPC) members. They believe that a combination of stricter monetary policies and well-coordinated fiscal actions by the federal government will be instrumental in curbing the sharp rise in the cost of living that has affected Nigerians since the post-COVID-19 period.
The CBN also noted that while year-on-year inflation continues to climb, it is the monthly figures that provide crucial insights into the impact of the interest rate hikes initiated in February. The apex bank reiterated that CBN Governor, Yemi Cardoso, has prioritized combating inflation as his chief objective, viewing it as essential for achieving sustainable economic growth in the medium to long term and for improving the living standards of ordinary Nigerians.
The MPC is expected to meet for the fourth time this year next week on July 22nd and 23rd, 2024. With year-on-year headline inflation now at 34.19%, another hike in the monetary policy rate (MPR) is expected this month.
