In 2025, experts forecast that inflation in Nigeria may begin to moderate, offering a potential easing cycle for the economy. During the First Bank outlook event, economists predicted that while inflation will remain high, it is expected to reduce gradually in the latter half of the year. Bismarck Rewane, a noted economist, suggested that inflation could drop to 25-27% by the year’s end, although it may remain above the levels initially hoped for.
The Central Bank of Nigeria raised interest rates to 27.5% to combat inflation, which surged to 34.6% in November 2024. Despite the challenges, economists like Biodun Adedipe are hopeful, predicting that inflation could fall to 33% by the end of 2024 and that the naira will moderately depreciate in 2025, with a forecasted exchange rate of N1,574.4 to the dollar. The Nigerian naira has already shown signs of recovery, appreciating by N125 against the dollar after the introduction of the Electronic Foreign Exchange Matching System.
While experts believe that inflation and interest rates will remain elevated in the first half of 2025, they anticipate a decline in the second half of the year. Ifeoluwa Dixon of FBNQUEST Asset Management highlighted that inflation and interest rates may ease by mid-Q3 2025, signaling a potential stabilisation of both the economy and the naira in the near future.