Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 25)

Inflation rate decreased for the second consecutive month in May 2021. More specifically, inflation rate fell to 17.93 percent in May 2021, 0.19 percent lower than the 18.12 percent recorded in April 2021.1 The decrease was driven by the food component of inflation which fell to 22.28 percent from 22.72 percent in the preceding month. By contrast, core component of inflation increased by 0.41 percent to 13.15 percent in the review period. The marginal decrease in food inflation could be linked to improved security in food-producing regions in the past weeks. On the basis of improved security, the prices of food could continue to fall leading to a decline in overall inflation. The Central Bank of Nigeria can increase the Monetary Policy Rate (MPR) which should reflect in the interest rates offered by commercial banks and decrease bond prices to reduce the money supply and address the persistent rise in prices.

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