The Centre for the Promotion of Private Enterprise (CPPE) has disclosed that the sharp deceleration of the headline inflation from 34.8 per cent in December 2024, to 24.48 per cent in January 2025, the drop in food inflation from 39.8 per cent to 26.08 per cent and the decline in core inflation from 29.28 per cent to 22.59 per cent did not come as a surprise to members of the Organised Private Sector (OPS) given the review of the computation base year from 2009 to 2024.
The Chief Executive Officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, made this known in a statement yesterday in Lagos, while reacting to the National Bureau of Statistics (NBS) Consumer Price Index and January 2025 headline inflation rate. He said there was an additional strong base effect on the inflation figures given the high inflation regime in 2024, which had a considerable effect on the year-on-year inflation outcomes.
Besides, Dr. Yusuf stated that demand in December 2024 was typically much more intense be cause of the festivities while the spending momentum in January was predictably much slower because of lower disposable incomes following intense spending in the previous month. He noted that these were some of the explanatory factors for the sharp deceleration in the inflation numbers in January 2025.
The CPPE boss said: “However, it is important to clarify that a drastic reduction in inflation figures is not tantamount to a reduction in price level. Inflation reduction simply means a reduction in the rate of increase in the general price level, not a reduction in price.
“The drastic deceleration in inflation should therefore be cautiously celebrated. “The reality of high prices has not changed and remains a major factor in the cost of doing business, cost of living and poverty equation in the country.
“Households and firms are still concerned about high energy costs, the strength of the naira, high interest rate, cost of imports, transportation costs and insecurity. It is hoped that the government will recalibrate its strategies to address these major cost drivers.”
