THIS DAWN — Nigeria’s inflation rate has declined to 16.84 percent in October 2025, marking a continued moderation in price pressures across key sectors of the economy.
This was disclosed in a new data obtained from the National Bureau of Statistics (NBS) and projections by the Access Bank Economic Intelligence Unit (EIU).
The development signals a gradual easing of inflationary trends that have persisted for much of the past two years of President Bola Ahmed Tinubu’s administration.
The combined effects of exchange rate stability, improved agricultural output, and fiscal policy discipline have seemingly begun to yield results.
Steady Decline in Headline Inflation
According to the Access Bank report, Nigeria’s headline inflation eased to 16.84% year-on-year in October 2025 from 18.02% in September, reflecting a 1.18 percentage point decline.
This represents one of the most significant month-on-month slowdowns recorded since early 2023.
The moderation was largely attributed to a slowdown in food and non-food inflation components.
It’s also driven by improved domestic food supply from the ongoing harvest season and relatively stable foreign exchange conditions in recent months.
“The sustained moderation of inflation in October 2025 was supported by ongoing harvests across major crop-producing regions, exchange rate stability due to consistent Central Bank interventions, and a relative improvement in supply chain efficiency,” the report stated.
See a table showing a three-year inflation and the decline of inflation below:
Food and Non-Food Prices Ease
Food inflation, which has been the main driver of Nigeria’s overall inflationary trend, reportedly slowed due to better market availability of key staples such as rice, maize, sorghum, and yams.
The Consumer Price Index (CPI), which measures average changes in prices over time, is projected to rise modestly by 2.1 points to 129.8 in October 2025 compared to September.
Analysts note that while prices continue to rise, the rate of increase has slowed, suggesting a potential turning point in Nigeria’s battle against double-digit inflation.
“The slowdown is encouraging, particularly because it coincides with agricultural harvest and exchange rate stability.
“If this momentum is sustained, we may see inflation return to mid-teens by the first quarter of 2026,” said Dr. Tunde Adeyemi, a Lagos-based economist.
Exchange Rate Stability as a Key Factor
The recent gains are also attributed to a more stable foreign exchange environment.
The naira has traded within a relatively narrow band in recent months, supported by improved foreign reserves and stricter regulatory oversight by the Central Bank of Nigeria (CBN).
Stable exchange rates have helped to ease imported inflation, particularly in fuel, transport, and manufactured goods.
This, in turn, has translated into reduced cost-push inflation pressures on consumers and businesses.
An analyst from Access Bank’s EIU noted: “With the naira holding steady and global commodity prices relatively calm, Nigeria’s inflation outlook is expected to remain on a downward trajectory in the short term.”
Economic Modelling and Forecasting Methodology
The Access Bank report explained that its projections were derived using an autoregressive model—a statistical technique that employs lags of the composite Consumer Price Index (CPI) alongside survey-based inflation expectations.
The approach aligns with the product definitions and measurement standards used by the NBS.
This ensures consistency and comparability with official data releases.
According to the methodology section of the report, the model takes into account historical CPI movements, seasonal variations, and market sentiment data from both consumers and businesses.
These are then combined to generate near-term inflation forecasts with a high degree of accuracy.
Cautious Optimism Ahead
Despite the positive trend, analysts caution that inflation risks remain, particularly from potential energy price adjustments.
Other factors are global commodity market volatility and domestic security challenges affecting agricultural supply chains.
“The decline in inflation is welcome, but sustainability depends on consistent policy coordination between the fiscal and monetary authorities.
“The government must ensure continued exchange rate stability, efficient food distribution, and energy cost control to prevent a rebound,” said Dr. Adeyemi.
Access Bank’s EIU projects that inflation could moderate further before the end of 2025, provided current macroeconomic conditions persist.
However, it warned that external shocks—such as rising global oil prices or currency volatility—could reverse the gains.
Looking Forward
The decline to 16.84 percent places Nigeria closer to the Central Bank’s medium-term target range of 9–12 percent, though significant work remains to restore full price stability.
Policymakers are expected to maintain cautious optimism as they balance growth, exchange rate management, and inflation control in the coming months.
If sustained, the October decline could mark the beginning of a more stable price environment.
It could also offer much-needed relief to households and businesses that have endured years of steep cost increases.
