CBN Warns of Potential Price Rise
Written by Blessing Ajibuwa on July 9, 2025
The Central Bank of Nigeria (CBN) has raised concerns that rising input costs across key sectors could spark a new wave of consumer price inflation. According to the CBN’s June 2025 Purchasing Managers’ Index (PMI) report, businesses are currently absorbing these costs, but this trend is unlikely to be sustainable in the long term.
*Key Highlights:*
– *Business Costs*: Rising costs of materials and operations are putting pressure on business profit margins.
– *Economic Growth*: Despite these challenges, the economy is growing, with more activity in farming, industries, and services, especially in agriculture.
– *Potential Consequences*: If businesses can no longer absorb these costs, prices may rise, affecting consumers.
*Sectoral Performance:*
– *Agriculture*: Recorded the highest input-output price gap in June 2025, at 9.8 index points, indicating that firms in the sector absorbed more costs relative to their output prices than any other sector.
– *Industry*: Posted a PMI reading of 51.4 index points, marking its sixth straight month of growth, driven largely by increased production levels.
– *Services*: Recorded a PMI of 51.3 points, with 11 out of the 14 subsectors showing expansion, attributed to increased business activity during the month.
The CBN’s warning highlights the need for businesses and policymakers to address the rising costs and find solutions to mitigate the impact on consumers.
