CPPE projects slight moderation in inflation rate in 2025

CPPE projects slight moderation in inflation rate in 2025

The Centre for the Promotion of Private Enterprise, CPPE, has projected that Nigeria’s inflation rate may moderate slightly in 2025.

This was announced by the Chief Executive Director of CPPE, Muda Yusuf, in a statement titled Nigeria 2024 Economic Review and 2025 Economy Outlook released on Sunday, December 29, 2024 in Lagos..

The economic think tank group noted that Nigeria’s inflation, which stood at 34.60 percent in November 2024, could cool off in an expected reduction in exchange rate volatility and likely rebound of the naira against the dollar.

According to CPPE, global oil prices are expected to rise in 2025 under President Donald Trump’s presidency in the United States.

“Inflation may moderate slightly on the expected reduction of the volatility of the exchange rate and possible rebound of the naira.

“Moderation in energy cost as the geopolitical tension eases as a result of the impact of the Trump presidency. There is a likely boost in global oil production as the USA increases production and the embargo on Russia eases. These are likely outcomes of Trump’s presidency.

“There is also the factor of the base effect on the inflation numbers, as inflation was generally elevated in 2024,” CPPE stated.

It, however, explained that Nigeria’s inflation may not be completely dissipated in 2025 due to high energy costs, exchange rates, transportation costs, and other key drivers.

“However, the following key drivers of inflation may not completely dissipate in 2025: High energy costs, including electricity tariffs, exchange rates, transportation costs, high interest rates, high cargo clearing costs, the impact of insecurity on agricultural output and food supply, climate change and flooding, imported inflation resulting from geopolitical tensions, supply chain disruptions, trade wars, and tight global monetary conditions.

In other projections by the think-tank, it noted that there appears to be a silver lining in the current reforms embarked upon by the current administration.

“Current economic reforms have their silver linings which include the following enormous opportunities for import substitution across all sectors. It reduces cost, and improves patronage and profitability. This is essentially about focusing more on backward integration initiatives” it noted.

By: Babajide Okeowo

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