CPPE: July Inflation Figures Presented Mixed Outlook, Seeks Structural Interventions

Dike Onwuamaeze

The Founder of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has stated that the July 2025 inflation figures presented a mixed outlook for the Nigerian economy, with notable improvements in some key indicators but with lingering risks that demand policy attention.

According to him, the July 2025 inflation report provides a basis for cautious optimism, arguing that while progress has been made in moderating headline and core inflation, the persistence of food and month-on-month price increases highlight unresolved structural weaknesses.

“A coordinated mix of monetary, fiscal, and structural interventions will be required to consolidate recent gains and steer the economy toward sustained stability,” Yusuf maintained.

He said that the positive trend is that headline inflation declined for the fourth consecutive month, easing from 22.22 per cent in June to 21.88 per cent in July, a deceleration of 0.34 per cent.

He also noted that month-on-month food inflation moderated, falling from 3.25 per cent in June to 3.12 per cent in July, while core inflation posted marginal declines year-on-year (-0.03 per cent) and a sharp slowdown month-on-month, from 3.46 per cent to 0.97 per cent.

Yusuf said: “These developments reflect a gradually stabilising macroeconomic environment, supported by exchange rate stability, improved investor confidence, and the lingering impact of import duty waivers on key staples such as rice, maize, and sorghum.

“The base effect, given the high inflationary conditions in 2022, has also been a strong factor in the recent downward trend.”

He said that despite these gains, pressures still persist as month-on-month headline inflation rose from 1.68 per cent in June to 1.99 per cent in July, while year-on-year food inflation inched up from 21.97 per cent to 22.74 per cent.

These movements, according to him, underscore the continuing vulnerability of the economy to supply-side shocks.

Yusuf, therefore, said that the outlook called for caution and sustained reforms that would give priority attention to foreign exchange (FX) stability by maintaining calm in the FX market to anchor inflation expectations.

He also called for structural reforms that would address constraints such as high logistics and import costs, insecurity, climate risks and port inefficiencies that elevate costs and sustain inflation.

Besides, he called for fiscal discipline that would ensure prudent government spending and manage liquidity injections effectively to prevent fueling inflationary pressures.

He also suggested that attention should be paid to monetary innovation by moving beyond conventional tightening tools toward more creative measures to manage liquidity in the economy, given that the lending rate in the economy had risen above 30 per cent for most businesses.