Nigeria’s Inflation Projected to Fall below 18% by November 2025 – Analysts

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Analysts at a Stanbic IBTC-hosted conference call project that Nigeria’s headline inflation will decline to between 17.0% and 17.9% year-on-year (y/y) by November 2025. This forecast is driven by favorable base effects and relative macroeconomic stability.

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Despite anticipated short-term monthly pressures, inflation is expected to remain below 20.0% by October. However, seasonal factors such as peak flooding in southern Nigeria and the lean agricultural season in the north may drive food scarcity and higher food prices in July and August.

Forecasts indicate July’s y/y inflation will be between 21.71% and 21.88%, and August at 21.28% to 21.63%. Core inflation is likely to remain stable in the near term, estimated at 1.1% to 1.3% month-on-month (m/m), due to relatively benign energy costs and a stable naira exchange rate

A notable spike in headline inflation is expected in December due to a sharp base effect created by the Consumer Price Index (CPI) rebasing. Assuming a conservative m/m reading of -0.4%, December’s inflation rate could be around 34.0% y/y.

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) is expected to hold interest rates steady at its July 21-22 meeting. Analysts anticipate a cumulative rate cut of between 150 and 200 basis points over the course of 2025, following an aggressive 875 basis point hike in 2024.

As one analyst noted, the MPC’s decision will reflect caution amid a still-volatile inflation outlook and global uncertainty. The committee may consider narrowing the asymmetric corridor around the Monetary Policy Rate (MPR) to signal a dovish tilt, with an earliest shift to a more accommodative monetary stance expected at the September meeting.

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