July 17, 2025/Cordros Report
According to data released by the National Bureau of Statistics (NBS), Nigeria’s headline inflation eased by 75bps to 22.22% y/y in June (May: 22.97% y/y). Disaggregating the data, food inflation accelerated by 83bps to 21.97% y/y, while core inflation rose by 48bps to 22.26% y/y. On a monthly basis, headline inflation increased by 15bps to 1.68% m/m in June (May: 1.53% m/m).
Food inflation extended its upward trend for the second consecutive month, rising by 107bps to 3.25% m/m (May: 2.19% m/m). A closer look shows a sharp rise in the Imported Food sub-basket (+4.10% m/m vs. May: -1.45% m/m), while prices in the Farm Produce category declined (-35.63% m/m vs. May: +22.38% m/m).
Elsewhere, core inflation rose by 136bps to 2.46% m/m, hitting a three-month high. The uptick was driven by price increases across key components, including Transport (+231bps to 2.04% m/m), ICT (+112bps to 2.72%), Alcoholic Beverages and Tobacco (+81bps to 0.93% m/m), Furnishings & Household Equipment Maintenance (+73bps to 1.56% m/m), Insurance & Financial Services (+72bps to 1.54% m/m), and Recreation and Culture (+6bps to 0.41% m/m). Conversely, price growth moderated in Restaurants and Accommodation Services (-399bps to 0.60% m/m), Health (-83bps to 0.11% m/m), Education Services (-82bps to -0.29% m/m), Utilities (-25bps to 0.73% m/m), Clothing and Footwear (-22bps to 0.24% m/m), and Miscellaneous Goods and Services (-3bps to 0.82% m/m) sub-baskets.
Outlook: Inflation is Likely to Maintain a Downtrend in July
Food inflation is expected to moderate in July, driven by the improved supply of seasonal farm produce, such as green maize, groundnuts, pumpkins, and vegetables, from the early green harvest. This increased availability is likely to ease price pressures on domestically produced food items, particularly in the southern and middle-belt regions. Nonetheless, persistent insecurity in key food-producing zones in the North continues to disrupt farming and transportation, keeping the broader food supply tight. Imported food inflation may also decelerate, supported by the relative stability of the naira. The reduced exchange rate volatility is expected to lower import costs for processed and packaged food products, helping to contain price increases in that segment.
At the same time, non-food inflation is projected to remain stable, reflecting steady energy prices and reduced exchange rate pass-through.
Overall, headline inflation is expected to moderate further in July, reflecting a slowdown in food and core inflation.
