Nigeria’s inflation rate surged to 34.80% in December 2024, dampening expectations for a potential rate cut by the Monetary Policy Committee (MPC) in its upcoming meeting. The National Bureau of Statistics revealed the rise, marking a 0.20 percentage point increase compared to November. Despite the higher annual inflation, monthly inflation dropped slightly to 2.44% from 2.64%, signaling some short-term relief, though the overall trend remains concerning.
Economist Bismarck Rewane suggested that inflation, which has heavily impacted household incomes and business profitability, could potentially ease later in the year. However, he projected inflation might increase to 35.4% in December 2025. He remains cautious, noting that inflation will likely not fall as quickly as expected and could stabilize at around 25-27% by the year’s end. Rewane also emphasized that the persistence of high inflation will prevent the MPC from cutting interest rates in the near term.
Food inflation, which comprises over half of Nigeria’s overall inflation, showed a slight improvement, decreasing to 39.93% in December from 239.84% in November. Core inflation also saw a moderate increase, rising from 1.83% to 2.24% month-on-month. The MPC’s next meeting is scheduled for January 27-28, where policymakers will likely hold off on adjusting borrowing costs until inflation shows more substantial signs of cooling.