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From Fred Ezeh, Abuja
The Independent Media and Policy Initiative (IMPI) has established a link between the steady increase in Nigeria’s Purchasing Manager’s Index (PMI) and the decline in inflation in the country for the seventh consecutive month.
This, according to the policy group is because the PMI reflects the state of health of the economy of a country.
In a statement signed by its Chairman, Dr Omoniyi Akinsiju, IMPI posited that Nigeria’s PMI recorded 11th consecutive month of expansion since the beginning of 2025.
It said: “By adopting the predictive regression model which uses ordinary least squares techniques to model inflation as a function of lagged values of key drivers, such as exchange rates or the PMI, we were able to establish a consistent pattern of increased productivity and general price reduction with higher intensity beginning from August 2025.
”By our reading, we attest to the inverse relationship between Nigeria’s PMI and inflation rate movements. To put this in context, an increase in PMI reflects in a decline in inflation because a PMI hike is suggestive of a higher growth momentum in production and productivity measured across 36 sectors of the economy.
”Since the beginning of the year, the PMI has shown consistent expansion with the latest reading for October being 55.4, indicating a strong and broad-based growth. This marks the 11th consecutive month of expansion, driven by growth in output, new orders, and employment across various sectors.
”The PMI has remained above the 50.0 threshold throughout 2025, signalling a sustained expansion in economic activities.
This, essentially, is predictive of the general movement of household items’ prices as captured in the Consumer Price Index (CPI),” it said.
