Nigeria’s headline inflation has eased for the third consecutive month, declining to 22.22% in June 2025 from 22.97% in May. This marks a notable 11.97% year-on-year drop from June 2024’s high of 34.19%, largely attributed to base effects and rebasing. However, despite this easing trend, economic analysts caution that the inflation outlook remains uncertain due to a rise in core and food inflation indicators.
Data from the National Bureau of Statistics (NBS) reveals that core inflation—excluding food and energy—climbed to 22.76% in June from 22.28% in May. Food inflation similarly increased to 21.97%, up from 21.14% in the prior month. On a monthly basis, food inflation jumped 1.07 percentage points, driven by rising prices of staples like green peas, tomatoes, crayfish, and plantain flour. This indicates growing inflationary pressure despite the general softening of the headline rate.
Analysts link the resurgence in food and core inflation to supply-side shocks caused by rising insecurity and natural disasters. Recent attacks in key agricultural states like Benue and Plateau have disrupted farming, forcing residents and farmers to flee, reducing food output and increasing losses. Although the full impact of these events is not yet reflected in June’s data, experts warn they could significantly affect future inflation figures.
Further compounding the issue, the Nigerian Meteorological Agency issued a flash flood alert for July, with Sokoto and other agricultural states at high risk. Analysts at Commercio Partners warn that this could cause severe disruption in food production, leading to higher food prices. While energy costs may ease due to a slight fuel price cut by the Dangote refinery, the reduction may not be enough to offset rising food inflation and ongoing security threats.
Looking ahead, analysts from Cowry Research forecast that inflation might dip slightly to 21.82% in July due to improved logistics and base effects. However, they remain cautious, noting that rising core inflation, persistent insecurity, and the lagging effects of FX volatility could reverse recent disinflation gains. The outlook remains fragile, with inflation risks heavily tied to food supply and national security conditions.
Source: Leadership