The Independent Media and Policy Initiative forecasts that Nigeria\u2019s inflation will drop to 17 per cent by December 2025, predicting continued disinflation.\n<\/p>\n
The latest inflation data from the National Bureau of Statistics indicated that inflation dropped 20.12 per cent in August from 21.88 per cent in July.\n<\/p>\n
In a policy statement on Wednesday, the policy think tank also called for the Monetary Policy Committee of the Central Bank of Nigeria to reduce the benchmark rate at its upcoming meeting in response to the dip in inflation.\n<\/p>\n
The chairman of IMPI, Dr. Omoniyi Akinsiju, said, \u201cWe have observed how some critics have dismissed the decline in the inflation rate as being of no consequence to the people, insisting dismissively that prices have not changed in any way to affect the mass of the Nigerian people. We consider this an expression of the intention not to acknowledge the federal administration\u2019s positive strides. Empirically speaking, the Nigerian economy is now in a disinflationary dispensation. Disinflation is a temporary slowing of the pace of price inflation and is used to describe instances when the inflation rate has reduced marginally over the short term.<\/p>\n
\u201cNigeria recorded a rare disinflation in 2025, with inflation falling from 24.5 per cent in January to 20.12 per cent in August, about a 17.5 per cent drop, the sharpest mid-year slowdown in over a decade. An analysis of 10 years of data shows that, unlike 2020\u20132024, when inflation accelerated, 2025 stands out alongside 2017 and 2018 as one of the few disinflationary years. Accordingly, Nigeria\u2019s inflation story in 2025 is taking an unusual turn because, for the first time in nearly a decade, the country is witnessing a meaningful and sustained slowdown in consumer prices. In relative terms, that is a 17.5 per cent reduction compared to the January level, a pace of disinflation rarely seen in Nigeria\u2019s modern economic history.\u201d\n<\/p>\n
The IMPI chairman said that the think tank had identified factors which its analysts insist are responsible for the decline in headline inflation in recent months. <\/p>\n
Three key factors are shaping Nigeria\u2019s inflation deceleration in 2025:CBN has kept rates at 27.50 per cent, slowing credit demands and speculative forex activities; a stable foreign exchange rate due to increased foreign exchange inflow into the country through oil, remittances, and non-oil export earnings; and better harvests and relative calm in food-producing regions have eased food price pressure. At 20.12 per cent in August, the apparent indication is that the year-on-year inflation rate has fallen below the 21 per cent target set by the CBN. However, with the momentum being generated in the economy, we can also safely aver that inflation may decline to 17 per cent in December 2025, a target near the 15 per cent set by the federal administration. Attaining this target has huge microeconomic implications.<\/p>\n
\u201cWe can project that the Central Bank\u2019s Monetary Policy Committee will consider easing the current 27.50 per cent monetary policy rate by at least 50 basis points at its next meeting and by at least 200 basis points by December 2025. Similarly, we also project a review of the cash reserve ratio from 50 per cent for bank deposits to 35 per cent by December 2025. This review will impact the cost of production, enhance business expansion, and create jobs because of the cheaper cost of credit and the quantum of cash available to money deposit banks to perform their financial intermediary roles,\u201d it added.\n<\/p>\n
IMPI also noted the rebound in the fortunes of some of Nigeria\u2019s largest businesses after they had suffered losses in the aftermath of the Federal Government\u2019s decision to float the naira.\n<\/p>\n
\u201cThe seven companies that had reported a combined loss of N418bn in Q1 2024 returned to a combined pre-tax profit of N289.8bn in Q1 2025. By the end of Q2 2025, all the consumer goods companies had returned to profitability with a combined pre-tax profit of about N264 bn.\n<\/p>\n
\u201cThis sharp earnings reversal highlights how currency stability and internal cost controls can quickly shift the fortunes of companies previously dragged down by macroeconomic headwinds. This captures the context in which domestic and global commentators have returned a verdict of stability for the Nigerian economy,\u201d IMPI stated.<\/p>\n","protected":false},"excerpt":{"rendered":"The Independent Media and Policy Initiative forecasts that Nigeria\u2019s inflation will drop to 17 per cent by December…\n","protected":false},"author":3,"featured_media":236251,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,79,67,132,68],"class_list":{"0":"post-236250","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-united-states","11":"tag-unitedstates","12":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115225110982966544","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/236250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=236250"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/236250\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/236251"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=236250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=236250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=236250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}