The inflation rate in Nigeria rose to 34.80% in December 2024 due to increased transport costs and heightened consumer spending over the holidays, as per the National Bureau of Statistics (NBS). This is an increase from the 34.60% reported in November, prompting discussions about a potential interest rate hike at the next Monetary Policy Committee meeting in February. Food and transport expenses were the primary contributors to the inflation surge, with food inflation slightly easing to 39.84% from the previous month.
Analysts like Samuel Onyekanmi anticipate that inflation could start to moderate in the second half of 2025, aiming to reach around 25% to 27% by the end of the year. The NBS recently recalculated the consumer price index (CPI) and gross domestic product (GDP), expanding the CPI basket to include 960 items to better reflect current consumption patterns. This adjustment, with 2024 as the new benchmark year, is expected to lead to more accurate inflation figures, with the new data set to be released at the end of January 2025.
The redistribution of weights within the CPI basket, specifically reducing the weighting of food from 51.8% to 40.1%, may potentially result in lower inflation rates. Economists like Olajide Oyadeyi view these adjustments as crucial for obtaining more precise economic data and facilitating better planning.