CPPE: Continued Easing of Core Inflation Reflects Positive Impact of Exchange Rate Stability

Nigeria's core inflation has continued to ease, a trend the Centre for the Promotion of Private Enterprise (CPPE) attributes to the positive impact of exchange rate stability and improved macroeconomic conditions. This moderation has helped curb imported inflation and broader non-food price pressures.

“

The continued easing of core inflation is, however, encouraging. It reflects the positive impact of exchange-rate stability and improved macroeconomic conditions in moderating imported inflation and broader non-food price pressures.

The latest inflation report from the Nigeria Bureau of Statistics (NBS) shows headline inflation slightly decreased from 15.93 percent in May to 15.91 percent in June. Month-on-month inflation also moderated from 1.75 percent to 1.66 percent. Dr. Muda Yusuf, CEO of CPPE, views these figures as evidence that headline inflation has largely stabilized.

“

Accordingly, the CPPE expects the Monetary Policy Committee to maintain the current monetary policy stance at its next meeting.

"The continued easing of core inflation is, however, encouraging," Yusuf stated. He believes the current data does not necessitate further monetary tightening by the Monetary Policy Committee. Yusuf emphasized that the primary drivers of inflation remain structural rather than demand-induced, and the focus should be on addressing these underlying issues.

“

The immediate policy priority should be for the monetary authorities to collaborate with the fiscal authorities to accelerate structural reforms that expand food supply, improve logistics, reduce energy and production costs, reduce debt service costs, strengthen domestic value chains and enhance productivity.

The CPPE recommends that monetary authorities collaborate with fiscal authorities to expedite structural reforms. These reforms should aim to expand food supply, improve logistics, reduce energy and production costs, lower debt service costs, strengthen domestic value chains, and enhance overall productivity. According to the CPPE, these measures represent the most sustainable path toward achieving lower inflation, stronger economic growth, and improved living standards for Nigerians.

“

These measures offer the most sustainable path to lower inflation, stronger growth and improved living standards.