Nigeria’s Economy Expands for 6th Straight Month as Agriculture Leads Growth – CBN Warns of Rising Cost Pressures

Nigeria’s economy has recorded its sixth consecutive month of expansion, according to the June 2025 Purchasing Managers’ Index (PMI) released by the Central Bank of Nigeria (CBN). Despite growing concerns over rising input costs, key sectors—agriculture, industry, and services—maintained upward momentum, reflecting broad-based economic recovery and increased business activity across the country.

The composite PMI stood at 52.3 index points in June, indicating continued growth. Out of the 36 subsectors surveyed nationwide, 25 showed positive expansion. The agriculture sector emerged as the top performer, with a PMI of 55.2 points—its eleventh consecutive month of growth—driven by intensified farming activity across all five agricultural subsectors.

The industrial and services sectors also saw moderate but steady growth, posting PMI scores of 51.4 and 51.3 points respectively. Within the industrial sector, nine of 17 subsectors expanded, while the services sector recorded increased activity in 11 out of its 14 subsectors. This trend underscores a sustained recovery and improving confidence among producers and service providers.

However, the CBN flagged rising input costs as a critical concern. Input price indices surpassed output prices across all sectors, squeezing profit margins and raising inflationary risks. Agriculture recorded the highest cost absorption index at 9.8 points, while services had the lowest at 4.4 points, suggesting mounting pressure on operational sustainability.

While businesses have so far absorbed the extra costs without passing them on to consumers, the apex bank warned that this may not be sustainable in the long run. It called for strategic policy interventions to cushion firms from persistent cost pressures and safeguard the stability of the current growth trajectory into the latter part of the year.

Source: The sun