Nigeria’s headline inflation moderated slightly in May, its second slowdown in two months, as a result of relative exchange rate stability and moderating fuel prices.
The National Bureau of Statistics reported headline inflation at 22.97%, down from April’s 24.2%, while food inflation declined to 21.14% from 21.79%.
The slowdown reflects a 1% naira appreciation in official markets, which eased import costs for manufacturers, and a temporary lull in global commodity prices. “The tight monetary environment and anchored exchange rate expectations played a critical role,” said Dumebi Oluwole, Senior Economist at Stears, who had projected a slowdown to 23.19%.
Olajide Oyadeyi of EconoDay noted that January’s CPI rebasing created favorable base effects, though energy and transport costs remained sticky.
However, inflation outlook remains mixed. Despite the deceleration, flooding in Benue State and parts of the Middle Belt disrupted farm-to-market supply chains, keeping food inflation elevated in localised regions. Samuel Oyekanmi, an analyst at a financial services group, Norrenberger, warned that “April’s 50% food inflation surge in Benue foreshadowed risks of regional shocks spilling into national averages.”
The Central Bank of Nigeria kept its benchmark interest rate unchanged at 27.50% in May, marking a second consecutive hold as policymakers assessed the impact of earlier tightening. The Monetary Policy Committee will closely examine the latest figures from May and June before deciding on any policy adjustments at its July meeting.
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