Nigeria’s inflation rate is expected to post a marginal decline, with data scheduled for release on Monday anticipated to show easing pressures on consumer prices.
Economic analysts from Coronation Merchant Bank said the decline would likely be driven by improved foreign exchange stability, ongoing harvest season supplies, and moderating food prices.
The bank projected that headline inflation for August will fall to 21.45% year-on-year, compared to 21.88% in July, while month-on-month inflation is expected to ease slightly to 1.74%.
According to Coronation Research, four key factors underpin this outlook:
- Increased food supply from early harvests, particularly maize, vegetables, pumpkins, and groundnuts, reducing price pressures in the South and Middle Belt.
- A moderation in imported food inflation, supported by a stable naira, which appreciated by 0.44% to ₦1,531.57/$1 in August.
- Declining energy costs, helping to lower production and transport expenses.
- Stronger foreign reserves, which rose by $1.91 billion to $41.27 billion, improving FX liquidity and sustaining market confidence.
However, analysts also warned of potential risks that could limit the pace of disinflation. These include a possible rise in petrol prices amid ongoing disputes between Dangote Refinery and NUPENG, as well as the risk of flooding, which could damage farmlands and disrupt supply chains.
Structural challenges such as poor road networks and limited storage facilities could also hinder improvements in food supply and distribution.
Despite these concerns, Coronation Research said the trend of easing inflation is expected to continue in the near term, supported by reforms in the foreign exchange market and seasonal food supply increases.
