Highlights

Two months post-implementation of the rebasing, the trajectory of Headline Inflation continues to trend downward, providing some relief to the economic landscape. Data from the National Bureau of Statistics (NBS) revealed that year-on-year Headline Inflation for February 2025 stood at 23.18%, marking a 1.30% reduction from the 24.48% reported in January 2024. The month-on-month slowdown was even more pronounced, with Headline Inflation decreasing dramatically from 10.68% to 2.04%.

Food Inflation printed at 23.51%, representing a 2.57% decline from 26.08% in January 2025. As stated by NBS, this decline is due to the change in the base year. On a month-on-month basis, the deceleration also stood out, plummeting to 1.67% from 10.33% in January 2025.

While Core Inflation exhibited a slight uptick, increasing by 42 basis points to 23.01% from 22.59% in January 2025, we observed that the month-on-month figure followed the moderating trend.

Outlook

By March 2025, Core inflation is expected to ease further, driven by recent shifts in the energy sector. The ongoing price war between Dangote Refinery and NNPC has pushed fuel prices lower, a trend that will likely soften inflationary pressures on transportation and energy costs, providing broader relief to consumers and businesses alike.

However, it is important to note that, as of mid-March 2025, the Naira experienced a 2% depreciation in the NAFEM market and a 5% in the parallel market. Given this backdrop, our outlook remains cautious, as sustained Naira depreciation could undermine the potential benefits of lower fuel prices.

Click here, “February 2025 Inflation – Softer Landing Post-Rebasing”, to view the full report.