Inflation Decelerates for First Time in Two Years
By Patience Ikpeme
Nigeria’s headline inflation rate has recorded a decline for the first time in 24 months, according to the National Bureau of Statistics (NBS). In July 2024, the inflation rate witnessed a decrease from 34.19% in June to 33.19% representing a decrease of 0.8 percentage points.
The core inflation rate slightly increased to 27.47% from 27.40%. Furthermore, the food inflation rate dropped to 39.53% compared to 40.87% in June 2024. .
However, the year-on-year inflation figure still presents a significant challenge, with a 9.32% increase compared to July 2023. This means the overall price level is rising at a faster pace than in the same period last year.
On a month-to-month basis, inflation eased slightly from 2.31% in June to 2.28% in July. While this indicates a slowdown in price increases, the overall trend remains upward.
The food inflation component continues to be a major concern, with the rate surging to 39.53% year-on-year. This is a 12.55% increase compared to the same period in 2023. The rise is attributed to price increases in essential items like bread, cereals, potatoes, yam, oil, and fats.
Despite a slight month-on-month decline in food inflation from 2.55% to 2.47%, the overall trend remains upward, with the average annual food inflation rate reaching 36.36%.
The NBS data also revealed disparities between urban and rural areas. While both regions experienced increased inflation rates compared to the previous year, the urban areas recorded a slightly higher rate.
The persistent rise in food prices, coupled with the overall inflationary pressures, poses significant challenges to Nigerians, particularly low-income households. The government’s recent measures, such as the 150-day duty-free import window for certain food items, are aimed at addressing this crisis but their impact on prices is yet to be fully realized.
