The National Bureau of Statistics (NBS) has released the Consumer Price Index (CPI) report for June 2024. It shows that Nigeria’s headline inflation rate has increased month over month for the first time since February 2024.
The CPI, which tracks how prices of goods and services that people use daily have changed on average over time, increased from 2.14% in May 2024 to 2.31% in June 2024.
The NBS report said as follows: “On a month-to-month basis, the headline inflation rate in June 2024 was 2.31%, 0.17% higher than the rate 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 indicates
Nigeria’s inflation rates fluctuated significantly between January and June of 2024. The monthly CPI was 2.64% in January 2024, but it spiked to 3.12% in February 2024, the highest inflation rate for this time frame.
But following February, the rate of inflation started to gradually decrease, hitting 3.02% in March, then dropping significantly to 2.29% in April, and then even lower to 2.14% in May.
June 2024 saw a rise in the monthly CPI to 2.31%, which shows a reversal of the prior months’ declining trend.
It’s interesting to note that, compared to May and April 2024, the monthly rate recorded in June is greater.
This increase in inflation indicates that Nigerians’ cost of living is rising once more, which may be a reflection of underlying economic pressures.
What to note
The Central Bank of Nigeria (CBN) recently stated that the tightening of its monetary policy, which was carried out earlier this year in response to increasing inflationary pressures, is beginning to produce the intended economic results. This announcement coincided with a jump in month-over-month inflation. The effectiveness of these efforts is demonstrated by the month-over-month headline inflation, which in May 2024 fell for the third time in a row, according to the CBN.
The CBN stressed in the statement that the monthly inflation trend supports the members of its Monetary Policy Committee’s (MPC) confidence. They think that the federal government’s well-coordinated fiscal initiatives along with tighter monetary policies will play a major role in reducing the dramatic increase in living expenses that Nigerians have been facing since the COVID-19 pandemic.
The CBN further stated that although inflation year over year is still rising, monthly data offers important new information about the effects of interest rate hikes that were started in February.
The central bank restated that CBN Governor Yemi Cardoso has made reducing inflation his top priority. He sees this as a necessary step towards medium- to long-term sustainable economic growth and raising the standard of living for average Nigerians.
The MPC is scheduled to convene for its fourth meeting of the year on July 22 and 23, 2024, which falls next week. With headline inflation now at 34.19% year over year, this month’s increase in the monetary policy rate (MPR) is anticipated.
