Nigeria's inflation falls first time in over a year

Nigeria's headline inflation rate decreased in July for the first time in more than a year, dropping to 33.40% in annual terms, down from 34.19% in June, according to data released by the statistics agency on Thursday.

Analysts had suggested that June's rate might have marked the peak of inflation as the effects of currency devaluation began to diminish. The decline in July offers some relief to Nigerians, who have recently protested over the rising cost of living and governance issues in Africa's most populous nation.

Inflation has been driven up by President Bola Tinubu's decision to eliminate a long-standing fuel subsidy, devalue the naira, and increase electricity tariffs. While these reforms are intended to boost economic growth and strengthen public finances, they have also led to soaring inflation and a decrease in people's purchasing power.

The last time annual inflation decreased was in December 2022.

The central bank has raised interest rates four times this year in an effort to control inflation. However, after the latest hike in July, some analysts believe this might be the final increase in the bank's current tightening cycle. The Central Bank of Nigeria's next rate-setting meeting is scheduled for late September.

According to a report from the National Bureau of Statistics released on Thursday, food and non-alcoholic beverages remained the largest contributors to inflation in July. Food inflation eased to 39.53% from 40.87% in June.