Nigeria’s headline inflation rate is projected to fall below the 18% mark in October, as analysts anticipate that the Consumer Price Index (CPI) will maintain its gradual downward movement for another consecutive month.
Ahead of Monday’s official release of the October 2025 CPI report by the National Bureau of Statistics (NBS), Cowry Research has forecast that headline inflation will decline further, settling at approximately 17.83%.
In a detailed market note, the investment research group explained that the anticipated easing is largely influenced by the naira’s continued stability, a more liquid foreign exchange environment, and steady food supply driven by harvest season activities across the country.
Despite the upward price adjustment of petrol motor spirit (PMS) recorded in early October — a development that raised some cost pressures — analysts at Cowry Research noted that the impact on overall inflation should remain small. This is attributed to PMS having relatively low weight within the CPI basket.
According to the firm, the latest estimate aligns with Nigeria’s broad disinflation trend that has been gaining traction throughout the year.
In September 2025, headline inflation slowed to 18.02%, easing from 20.12% in August — the sixth straight month of moderation. The figure came in lower than Cowry Research’s projection of 19.73%, reinforcing expectations that inflation may continue softening towards year-end.
Month-on-month inflation also decelerated slightly, printing 0.72% in September compared to 0.74% in August, reflecting milder price increases across several key spending categories.
Annually, headline inflation was 14.68 percentage points lower than the 32.70% documented in September 2024, the lowest year-on-year inflation reading recorded since May 2022’s 17.71%.
The main contributors to annual inflation remained Food & Non-Alcoholic Beverages (7.21%), Restaurants & Accommodation Services (2.33%), and Transport (1.92%).
On a monthly basis, food inflation led the pack once again, adding 0.29%, while restaurants contributed 0.09% and the transport segment added 0.08%.
Food prices saw some of the most significant relief in September. Year-on-year food inflation slipped to 16.87%, down sharply from 37.77% recorded a year earlier, supported by high base effects and increased availability of produce during harvest. Prices of beans, onions, garri, maize, and other key staples fell noticeably. On a monthly basis, food inflation posted –1.57%, compared with 1.65% in August — signalling rare deflation in food prices.
Core inflation also eased, dropping to 19.53% year-on-year, compared to 27.43% in September 2024. Month-on-month core inflation moderated to 1.42%, just below the 1.43% recorded in August. Analysts attributed this trend to a more stable FX market and improved access to dollars, which helped ease import cost pressures.
Market data showed that Bonny Light crude averaged $66.15 per barrel in October 2025, representing a 5.77% drop from September’s $70.20 per barrel.
Meanwhile, PMS prices rose from N865 per litre in early October to N992 per litre by mid-month following supply disruptions attributed to the ongoing PENGASSAN industrial action. Prices later dropped to about N922 per litre as distribution normalised. The temporary spike in petrol prices drove increases in transportation, food services, and hospitality — sectors that are highly sensitive to energy costs.
The naira, however, recorded strong performance in the FX market in October, appreciating by 2.55% to average N1,459.54/$1, compared with N1,497.79/$1 in September. This helped moderate the price of some imported goods, including imported rice, which fell by 0.71% month-on-month.
Cowry Research believes that the persistent cooling of inflation, combined with the Central Bank of Nigeria’s policy rate cut in September, creates room for an additional rate reduction when the Monetary Policy Committee (MPC) convenes in November 2025.
Analysts expect another 50-basis-point cut, citing improving macroeconomic indicators. Although concerns such as policy uncertainties and public commentary may generate slight risks, market watchers remain optimistic that timely interventions will cushion any spillovers.
