Inflation May Drop To 27% By December — Report

Nigeria's inflation rate is expected to decline to 27.1% by December 2025, according to the latest NESG-Stanbic IBTC Business Confidence Monitor report. This forecast suggests that while inflation may remain high until September 2025, it should drop below 30% thereafter, as the impact of high petrol prices diminishes. The report attributes this expected decline to the easing of inflationary pressures, particularly in the second half of 2024, following the removal of fuel subsidies and the liberalization of the foreign exchange market.

The anticipated decline in inflation is also expected to influence monetary policy, with the Central Bank of Nigeria's Monetary Policy Committee potentially adopting a more accommodative stance in late 2025, potentially reducing interest rates to stimulate economic activity. The Nigerian economy is projected to grow by 3.5% year-on-year in 2025, up from an estimated 3.2% in 2024, driven by improved conditions in key sectors such as agriculture, manufacturing, and non-manufacturing industries.

Some experts, like Bismarck Rewane, believe that the proposed telecom tariff hike could also contribute to reducing inflation by increasing productivity. However, the likelihood of a 100% hike is low, with a more moderate adjustment of between 40% and 50% expected. Overall, the forecast suggests that Nigeria's inflation rate may be on a downward trend, but it's essential to monitor the situation closely and address any potential challenges that may arise.

https://www.channelstv.com/2025/01/10/inflation-may-drop-to-27-by-december-report/