Nigeria’s Inflation Set to Drop to 17% by Year-End, IMPI Projects Economic Relief

The Independent Media and Policy Initiative (IMPI) has forecasted a significant drop in Nigeria’s inflation rate, projecting it to reach 17 percent by December 2025. The think tank highlighted a continued trend of disinflation, signaling a slowdown in the pace of consumer price increases across the country.

According to the latest data from the National Bureau of Statistics (NBS), Nigeria’s inflation rate declined to 20.12 percent in August from 21.88 percent in July. In a policy statement released on Wednesday, IMPI urged the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to consider reducing the benchmark interest rate in response to the easing inflation.

Dr. Omoniyi Akinsiju, IMPI’s chairman, explained that while some critics have downplayed the significance of falling inflation, the decline represents a meaningful economic shift. “Disinflation is a temporary slowing of the pace of price inflation, and 2025 stands out as one of the few years in recent history showing a sustained slowdown,” Akinsiju said. He noted that inflation fell from 24.5 percent in January to 20.12 percent in August, marking the sharpest mid-year slowdown in over a decade.

IMPI identified three main drivers behind this disinflation trend: the Central Bank maintaining high interest rates of 27.50 percent, a stable foreign exchange rate supported by oil revenues, remittances, and non-oil exports, and improved agricultural output leading to eased food price pressures. The think tank also suggested that if current trends continue, inflation could approach 17 percent by year-end, close to the 15 percent target set by the federal administration.

The report further highlighted positive spillovers for Nigeria’s business sector. Companies that suffered losses following the naira’s float in 2024 have rebounded, with seven major firms reporting a combined pre-tax profit of N289.8 billion in Q1 2025, reversing previous losses. IMPI emphasized that currency stability, better internal cost management, and monetary policy adjustments are helping stabilize the economy and create a more favorable environment for business growth.

source: punch