Headline inflation fell to 33.40% in July from 34.19% in May. This is the first fall since December 2022.
It looks like the CBN’s interest rate hikes 4 times in the last 5 months is finally having a positive effect on the economy.
This could also mean that the market has adjusted to the policies – Fuel subsidy removal and floating exchange rate initiated by the President at his inauguration in June, 2023.
The headline inflation fell by 0.80 percentage point difference between June and July. The Minister of Finance, Mr Wale Edun attributed the inflationary pressure so far to food inflation.
The new CPI for July proved his point, as the headline inflation fell just at the time the food inflation fell in July to 39.53% from 40.87% in June.
This is a 1.34 percentage point fall in food inflation rate. Also the first fall in 19 months.
Although the Headline and food Inflation decreased, the Core Inflation which excludes food items and energy prices, rose by 0.07% point difference from 27.40% in June to 27.47% in July.
According to the NBS, Core Inflation includes the cost of housing, transportation, clothing, health, communication, etc., excluding food and energy costs.
This confirms the statement by the CBN that food inflation is the main driving force of the inflation rate in Nigeria.
As indicated by Mr Edun, “there are still intervention programs on the way to decrease the cost of living and increase growth in the different sectors of the economy.
“The effort was going to continue to ensure that the interventions and measures to ameliorate the high cost of living for individuals, for the agricultural sector, for industry, for Small-Scale businesses, were going to continue to be implemented with all efforts needed for success.