Nigeria’s headline inflation is projected to fall to between 17.0% and 17.9% year-on-year (y/y) by November 2025, pushed by beneficial base results and relative macroeconomic stability, based on analysts at a Stanbic IBTC-hosted convention name.
The projection displays optimism that inflation will stay under 20.0% by October, regardless of anticipated short-term month-to-month pressures.
Within the close to time period, inflation on a month-on-month (m/m) foundation might climb additional in July and August, that are sometimes marked by peak flooding in southern Nigeria and the lean agricultural season within the north. These seasonal components traditionally drive meals shortage and better meals costs, contributing to short-term value pressures.
Learn additionally: Declining inflation paves way for cautious monetary policy easing
Nonetheless, analysts count on the bottom results from final 12 months’s elevated inflation figures throughout the identical interval to average the annual inflation readings. Forecasts put July’s y/y inflation at between 21.71% and 21.88%, and August at 21.28% to 21.63%.
Regardless of these fluctuations, core inflation is more likely to stay secure within the close to time period, estimated at 1.1% to 1.3% m/m, due to comparatively benign vitality prices and a secure naira alternate fee. Nonetheless, December might witness a notable spike in headline inflation attributable to a pointy base impact created by the Shopper Worth Index (CPI) rebasing.
The rebased CPI had proven inflation at 15.44% y/y in December 2024, in comparison with a pre-rebase determine of 34.80% y/y. This sharp drop within the base determine units the stage for a excessive comparative fee in December 2025, estimated at round 34.0% y/y, assuming a conservative m/m studying of -0.4%.
For inflation to finish the 12 months at 17.0% y/y, month-to-month inflation would want to fall by an unlikely 12.8%. If, nonetheless, the Nationwide Bureau of Statistics (NBS) reverts to the pre-rebased 34.8% for December 2024, then end-2025 inflation might land nearer to 22.0% to 23.0% y/y.
On the financial coverage entrance, the Central Financial institution of Nigeria’s Financial Coverage Committee (MPC) is predicted to carry rates of interest regular at its July 21–22 assembly, reflecting warning amid a still-volatile inflation outlook and international uncertainty.
At its Might assembly, the MPC had maintained all coverage parameters, reiterating its concentrate on anchoring inflation expectations and managing alternate fee pressures. Whereas some committee members might favour a fee lower in July, meals value dangers and broader financial instability might delay such a transfer.
The earliest shift to a extra accommodative financial stance is predicted on the September assembly, when clearer inflation moderation might assist easing.
Within the interim, the MPC might think about narrowing the uneven hall from the present +500 foundation factors/-100 foundation factors across the Financial Coverage Fee (MPR) to sign a dovish tilt. Analysts anticipate a cumulative fee lower of between 150 and 200 foundation factors over the course of 2025, following an aggressive 875 foundation level hike in 2024.
