Inflation Report for March 2025

The NBS announced its March Inflation numbers:
Headline rate: 24.23%y/y (23.18% y/y in February)
Core rate:         24.4% y/y
Food rate:        21.79%y/y

• The inflation report for march shows that Food inflation eased to 21.79%y/y compared to 23.51% as of February 2025, but on a month-by-month basis it rose by 2.18%.
• Core inflation (all items less farm produce and energy) increased to 24.43% from 23.00% as of February 2025.
• On a month-to-month basis the Headline Inflation Rate rose by (3.90%) from the February rate (2.04%) signifying a faster rate of increase in the average price levels.
• The increase in the inflation rate is concerning as a downward trend was expected and was caused mainly by food and non-alcoholic beverages which contributed 9.28 % to the increase. The Government’s push to reduce food inflation through removing the restriction on imports of certain food items and improving security in the food basket states is yet to show a material effect.
• Domestic PMS prices also rose across the country in March, following the announcement by Dangote Refineries that due to the non-renewal of Naira-for-crude agreement they will stop selling PMS in Naira and they then raised the Ex-Depot price.
• At the Monetary Policy Committee (MPC) meeting which held on the 19^th and 20^th February 2025, the monetary policy rate was retained at 27.50%, the asymmetric corridor was retained around the MPR at +500/-100 basis points, retain the cash reserve ratio of Deposit Money Banks at 50.00% and Merchant Banks at 16%, and to retain the Liquidity ratio at 30.00%.
• Looking ahead, food inflation will be watched closely to see if this upward trend continues and whether the removal of the restriction of some food imports will have an effect. Also given that oil prices are trending lower with its knock-on effect on fuel prices this could also have an effect on inflation in April.
• The developing tariff/trade war is fuelling global market uncertainty and fears of global inflation which may influence the cost of Nigerian imports and inflationary pressure in the country. The IMF has, however so far, maintained global growth projections for 2025 and 2026 at 3.3%. Source: Coronation Notes