Nigeria’s inflation rate is projected to record another decline in August, with analysts attributing the trend to foreign exchange stability and increased food supply from the harvest season.
Coronation Asset Management, in its inflation outlook released ahead of the National Bureau of Statistics’ (NBS) August inflation report, said it expected headline inflation to ease to 21.45 per cent year-on-year, marking the fifth consecutive monthly slowdown. On a month-on-month basis, inflation is forecast to drop slightly to 1.74 per cent.
Analysts at the firm explained: “Our inflation projection for August 2025 is underpinned by four key factors. Increased food supply from the early harvest is expected to ease price pressures, while imported food inflation should moderate on the back of naira stability. Energy costs declined modestly, easing production and transport expenses, and stronger reserves have boosted market confidence and supported CBN interventions.”
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The NBS July figures showed that inflation eased to 21.88 per cent year-on-year from 22.22 per cent in June. This represented an 11.52 percentage point decline compared to July 2024 when inflation stood at 33.40 per cent. Core inflation, which excludes volatile food and energy prices, also slowed to 21.33 per cent in July from 27.47 per cent a year earlier.
Food inflation remained elevated at 22.74 per cent in July but was significantly lower than the 39.53 per cent recorded in the same month of 2024. Month-on-month, food prices rose 3.12 per cent, marginally below the 3.25 per cent increase recorded in June, with staple foods such as vegetable oil, rice, maize, and wheat flour driving the moderation.
Coronation Asset Management, however, cautioned that risks remain. It stated: “Fuel prices may rise amid the dispute between Dangote Refinery and the petroleum workers’ union over unionisation of truck drivers, while flooding could disrupt food supply and reverse some of the recent gains. These factors may limit the pace of disinflation or keep inflation anchored around 22 per cent.”
Similarly, AIICO Capital, in its July Inflation Watch, suggested that the Central Bank’s Monetary Policy Committee might consider easing rates at its next meeting if the downward trend continues. “We expect that any further decline in the inflation rate in August could prompt the MPC to consider a rate cut when it meets again in September,” the firm said.
The NBS is expected to publish the official August inflation data today.
