The Central Bank of Nigeria (CBN) has raised concerns over potential consumer price inflation as rising input costs continue to outpace output prices across key sectors of the economy.
In its June 2025 Purchasing Managers’ Index (PMI) report, the apex bank revealed that businesses in the agriculture, industry, and services sectors are absorbing escalating operational costs without proportionately increasing their output prices, a trend the CBN warns may become unsustainable.
“The increase in the gap between higher input costs and output price tends to mount pressure on business profit margins. Cost absorption by firms is likely to be unsustainable in the long term and may foreshadow future consumer price inflation,” the report stated.
According to the data, the agriculture sector showed the widest margin between input and output costs, posting a cost absorption index of 9.8 points. The services sector recorded the lowest at 4.4 points. This trend points to growing pressure on businesses that may soon be forced to pass on these costs to consumers, potentially driving up prices nationwide.
Despite these pressures, Nigeria’s economy showed continued resilience. The composite PMI for June stood at 52.3 index points, marking the sixth consecutive month of economic expansion. Out of 36 sub-sectors surveyed across the country, 25 reported growth, highlighting broad-based recovery momentum.
Sector-specific growth figures include:
- Agriculture: 55.2 index points – highest growth, driven by a boost in farming activities.
- Industry: 51.4 index points – continued growth in production, with nine out of 17 sub-sectors expanding.
- Services: 51.3 index points – boosted by increased business activity in 11 of 14 sub-sectors.
The CBN emphasized that while economic indicators remain positive, the rising input costs could eventually lead to inflationary trends, particularly if firms are unable to continue absorbing rising expenses.
