Nigeria’s headline inflation rate has declined sharply to 24.48% year-on-year in January 2025, marking a significant drop from the 34.80% recorded in December 2024. This was disclosed by the National Bureau of Statistics (NBS) on Tuesday, as announced by the Statistician-General of the Federation, Adeyemi Adeniran, during a press briefing in Abuja.
Adeniran explained that the decline in inflation was largely influenced by the recent rebasing of the Consumer Price Index (CPI), which measures the rate of change in prices of goods and services. The rebasing process updated the reference year used for price evaluations, ensuring that the basket of goods and services better reflects current consumer spending patterns and economic conditions.
According to the new figures, urban inflation for January stood at 26.09%, while rural inflation was recorded at 22.15%. The rebased food inflation rate came in at 26.08% year-on-year, showing a decline compared to the 39.84% recorded in December 2024. Similarly, the rebased core index, which excludes volatile items such as agricultural produce and energy, stood at 22.59% year-on-year.
Adeniran noted that the new CPI methodology provides a more accurate representation of the inflationary pressures affecting the economy. The changes suggest a relative ease in price increases compared to the previous measurement system, which reflected much higher inflation figures.
Despite the reported decline, economic analysts remain cautious, pointing out that the lower inflation rate does not necessarily mean that consumer prices have dropped significantly, but rather that the pace of price increases has slowed. Many households and businesses continue to face financial strain due to the rising cost of essential goods and services.
The rebased CPI figures also highlight the ongoing efforts of the government to better track economic trends and manage inflationary pressures. The updated inflation data is expected to play a critical role in shaping future monetary and fiscal policies aimed at stabilizing the economy and improving purchasing power for Nigerians.
With the new inflation data now reflecting current economic realities, stakeholders will be closely monitoring how government policies and global economic conditions influence inflation trends in the coming months.
