Abuja, July 9, 2025 — The Central Bank of Nigeria (CBN) has issued a warning that persistent increases in input costs across key sectors may soon trigger a resurgence in consumer price inflation. The alert follows the release of the June 2025 Purchasing Managers’ Index (PMI) report by the bank.
According to the CBN, input price indices in the composite economy—including industry, services, and agriculture—significantly exceeded output price indices during June. While businesses have absorbed these cost pressures, the trend is deemed unsustainable over time, as profit margins tighten and companies may be forced to raise prices for consumers .
The agriculture sector, in particular, reported the widest input-output price discrepancy at 9.8 index points, indicating farmers are under the greatest strain. The services sector experienced the smallest gap, recorded at 4.4 points, though it still shows underlying pressure .
Despite these cost challenges, economic activity expanded for the sixth consecutive month. The composite PMI climbed to 52.3, up from 52.1 in May, signaling continued growth across 25 of the 36 surveyed subsectors—including industry, services, and notably, agriculture .
Key Implications
Inflation risk: The gap between rising input costs and slower-growing output prices suggests consumer inflation may rise if firms start passing on costs.
Food security concern: Given agriculture’s position in the cost hierarchy, potential price hikes could exacerbate food price inflation—a matter of national concern.
Economic resilience: Robust PMI readings suggest the economy remains vibrant; however, underlying cost pressures could undermine the recovery if not addressed.
