…The combination of lower headline inflation and a pronounced moderation in core inflation strengthens the case that Nigeria has entered a more durable disinflation phase
MON AUG 17 2026-theGBJournal| Nigeria’s headline inflation rate slowed to 15.43% in July 2026 from 15.91% in June, extending the year-on-year disinflation trend and offering further evidence that price pressures have moderated from the exceptionally high levels recorded a year earlier.
But the latest figures contain a less reassuring signal beneath the headline: food inflation accelerated sharply on a month-on-month basis, while rural food-price pressures also strengthened, suggesting that the improvement in overall inflation remains uneven.
The Consumer Price Index (CPI) increased to 145.3 in July 2026, reflecting a 2.2-point increase from the preceding month (143.0).
In July 2026, the Headline inflation rate stood at 15.43%, down from 15.91% in June 2026 and stood at 24.94% in the same month of the preceding year (July 2025).
Looking at the movement, the July 2026 Headline inflation rate showed a decrease of 0.48 percentage points compared to the June 2026 Headline inflation rate.
On a month-on-month basis, the Headline inflation rate in July 2026 was 1.57%, which was 0.09 percentage points lower than the rate recorded in June 2026 (1.66%).
This means that in July 2026, the rate of increase in the average price level was lower than the rate of increase in the average price level in June 2026.
Disinflation broadens, but underlying pressures need watching
Core inflation — all items excluding farm produce and energy — eased by 94 basis points to 14.97% year-on-year in July, compared with 15.92% in June. On a month-on-month basis, the core index rose at a substantially slower pace of 0.15%, compared with 1.66% in June.
We note that this is one of the more encouraging elements of the July report. The moderation in core inflation suggests that the easing in headline inflation was not driven solely by movements in volatile food prices.
A sharp slowdown in the monthly core index also points to weaker underlying price momentum across non-food components of the consumer basket.
We also note that the combination of lower headline inflation and a pronounced moderation in core inflation strengthens the case that Nigeria has entered a more durable disinflation phase.
However, the pace of improvement should not be mistaken for an outright reversal in the cost-of-living problem.
At 15.43%, inflation remains high, and the monthly food data indicate that households are still exposed to renewed price shocks.
The average twelve-month annual inflation rate was 18.09% for the twelve months ending July 2026, which was 8.47 percentage points lower than the 26.56% recorded in July 2025.
Food inflation is the major warning signal
The Food inflation rate in July 2026 was 20.31% on a year-on-year basis, compared with 26.20% in the same month of the preceding year (July 2025).
On a month-on-month basis, however, the Food inflation rate in July 2026 was 5.56%, up by 1.82 percentage points from June 2026 (3.75%).
The acceleration can be attributed to changes in the average prices of the following products: Crayfish, Pepper (Fresh), Onions (Fresh), Carrots (Fresh), Rice, Water Yam, Tomatoes (Fresh), Garri, Plantain, Beef, Egg, Guinea Corn, Ginger, Plantain Flour, etc.
This divergence between year-on-year and month-on-month food inflation is particularly important.
The annual rate is falling because the comparison is now being made against the much higher prices recorded a year earlier.
The monthly rate, by contrast, captures what is happening to prices more immediately — and the 5.56% July reading shows that food-price pressures intensified materially during the month.
TheG&BJournal analysts reckon that this is arguably the biggest caveat in the July inflation report.
The headline number is moving in the right direction, but the sharp rise in monthly food inflation suggests that disinflation is not yet firmly embedded in Nigeria’s food supply chain.
Fresh produce, staples and protein remain vulnerable to logistics costs, seasonal supply constraints, transportation expenses and disruptions between farms and consumer markets.
The average annual rate of Food inflation for the twelve months ending July 2026 over the previous twelve-month average was 16.06%, which was 14.79 percentage points lower compared with the average annual rate of change recorded in July 2025 (30.85%).
The percentage change in the average CPI for the twelve months ending July 2026 over the average for the previous twelve-month period was 16.89%, showing a 12.21% decrease compared to 29.10% recorded in July 2025.
Urban inflation eases as rural monthly pressures rise
On a year-on-year basis, in July 2026, the Urban inflation rate was 16.12%.
On a month-on-month basis, the Urban inflation rate was 1.90% in July 2026, down by 0.23 percentage points compared to June 2026 (2.13%).
The corresponding twelve-month average for the Urban inflation rate was 16.81% in July 2026. This was 13.93 percentage points lower compared to the 30.74% reported in July 2025.
The Rural inflation rate in July 2026 was 13.77% on a year-on-year basis.
On a month-on-month basis, the Rural inflation rate in July 2026 was 0.78%, up by 0.25 percentage points compared to June 2026 (0.52%).
The corresponding twelve-month average for the Rural inflation rate in July 2026 was 16.72%. This was 10.33 percentage points lower compared to the 27.05% recorded in July 2025.
The July figures should give policymakers additional room to assess the effectiveness of the broader macroeconomic stabilisation programme.
The decline in headline inflation, slower monthly price growth and sharp moderation in core inflation collectively suggest that inflationary momentum is weakening.
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