Notable rise across headline, food and core inflation rate in Nigeria

In our June forecast, we projected a modest increase in month-on-month (MoM) inflation, driven
primarily by a spike in oil prices—stemming from geopolitical tensions in the Middle East—and a mild
uptick in food prices. The June inflation report confirmed this expectation, with a notable rise in MoM
inflation across headline inflation rate (+0.15%), food inflation rate (+1.07%) and core inflation rate
(+1.36%).
However, due to the rebasing effect applied to the Consumer Price Index (CPI), June year-on-year (YoY)
inflation recorded a decline, despite the upward monthly movement.

U n d e r l y i n g D r i v e r s o f t h e J u n e 2025 I n f l a t i o n S p i k e

• Headline inflation (1.68%): The headline inflation rate rose by 0.15% to 1.68% in June 2025, up from
  1.53% in May. According to the NBS, this reflects a higher average price level compared to the
  previous month.
• Food Inflation (3.25%): Food inflation rose by 1.07% to 3.25% in June 2025, according to the NBS.
  The increase was driven by higher average prices of key staples, including dried green peas, fresh
  pepper, white dried shrimps, crayfish, fresh meat, fresh tomatoes, plantain flour, and ground pepper.
• Energy (-11.04%): While the NBS reported a significant moderation in energy inflation, from -0.43%
  in May to -11.0% in June, our independent market checks indicate a contrary trend. Specifically, we
  observed a notable uptick in the pump price of Premium Motor Spirit (PMS), rising from N880 to
  N930 in the first half of June, indicating a potential timing difference between official pricing data
  and real-time market conditions.
  R e g i o n a l I n f l a t i o n T r e n d s
  In June 2025, headline inflation (Year-on-Year) was highest in Borno (31.63%), Abuja (26.79%), and
  Benue (25.91%), reflecting continued price pressures in these regions. Conversely, Zamfara (9.90%),
  Yobe (13.51%), and Sokoto (15.78%) recorded the lowest YoY inflation rates, indicating more moderate
  price growth.
  On a Month-on-Month basis, the highest increases in inflation were seen in Ekiti (5.39%), Delta (5.15%),
  and Lagos (5.13%), suggesting short-term price pressures in southern states. Meanwhile, Zamfara (-
  6.89%), Niger (-5.35%), and Plateau (-4.01%) posted the largest MoM declines, contributing to a broader
  national deceleration. Notably, this marks the third monthly inflation decline in 2025 following the
  rebasing exercise, signaling a potential shift in inflation dynamics despite regional disparities. SOURCE: Coronation Merchant Bank