Nigeria’s Soaring Inflation To Start Moderating In January, Analysts Reveal

Nigeria’s Soaring Inflation To Start Moderating In January, Analysts Reveal

Lagos, January 17, 2025 — Financial experts at the Financial Derivative Company (FDC) have predicted a downward shift in Nigeria’s inflation rate beginning in January 2025. This follows an analysis of December 2024’s inflation report by the…Nigeria’s Soaring Inflation To Start Moderating In January, Analysts Reveal

National Bureau of Statistics (NBS), which revealed a fourth consecutive month of rising inflation, reaching 34.8%.

Despite the upward trend, the FDC experts believe that inflation will begin to ease this month. They noted that the Central Bank of Nigeria (CBN) is unlikely to adopt aggressive monetary policies in its upcoming meeting and is instead expected to closely monitor the inflationary trends before making any significant moves.

According to the NBS, the December spike was largely driven by increased consumer demand during the holiday season, with food and non-alcoholic beverages contributing significantly to the price increases.

Inflation has been on the rise since September 2024 when it climbed from 32.15% in August to 32.7%. This was followed by further hikes to 33.8% in October and 34.6% in November, signaling a sharp rise in the cost of living compared to the same period in the previous year.

Experts, including economist Stephen Iloba, largely agree with the FDC’s forecast. Iloba believes that the chances of inflation beginning to moderate in January outweigh the possibility of another surge. “The drop in petrol prices across Nigeria in December, coupled with stable pricing, should ease food inflation, a key driver of the broader inflationary pressures,” Iloba explained.

On a month-on-month basis, the NBS recorded a slight slowdown in inflation from November to December, decreasing from 2.64% to 2.44%. This indicates a small deceleration in the rate of price increases.

Additionally, the 12-month average inflation rate for the year ending December 2024 stood at 33.24%, up from 24.66% in 2023, highlighting the significant impact inflation has had on Nigerians’ purchasing power.

As the new year begins, all eyes are on the CBN’s next steps and the expected effects on Nigeria’s inflation trajectory.

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