Kehinde Fajobi
Nigeria’s headline inflation is projected to average 30.5% year-on-year in 2025, declining to 27.1% by December, according to the NESG-Stanbic IBTC Business Confidence Monitor report.
The report, released on Friday, attributed the forecast to the gradual stabilisation of high petrol costs in the inflation calculation, barring unexpected shocks to fuel prices.
“We expect headline inflation to remain sticky in 9M:25 but settle below 30.0% from September 2025 as high petrol cost gets smoothened out of the year-on-year headline inflation,” the report stated.
It also highlighted other economic factors, including fiscal deficits, food supplies, and currency exchange rates, as contributors to inflation trends.
The anticipated easing of inflation could prompt the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to adopt a more accommodative monetary stance.
“In our view, this could induce the MPC to switch to an accommodative monetary policy stance in late 2025,” the report noted.
A relatively lower inflation rate in the latter half of 2025 is expected to boost consumer spending and business activities as the effects of foreign exchange liberalisation and fuel subsidy removal subside.
The report projected Nigeria’s economy to grow by 3.5% in 2025, up from an estimated 3.2% in 2024.
In addition, the report observed a slight recovery in business performance in December 2024, spurred by festive demand.
The Current Business Performance Index rose to +0.77 from -2.74 in November, marking the first positive reading since September 2024.
Agriculture emerged as the best-performing sector with a net balance of +13.93 due to heightened harvest activities and increased demand.
Non-manufacturing industries followed with a net balance of +5.80, while manufacturing, trade, and services sectors continued to face challenges.
The Future Business Expectation Index, reflecting optimism for the first quarter of 2025, stood at +28.61 in December, down slightly from +33.17 in November.
Despite the decline, it indicated cautious optimism, particularly in agriculture, manufacturing, and non-manufacturing sectors.