Analysts Predict 18.89% January Inflation On Base Effects

Analysts expect Nigeria’s headline inflation rate to rise when January data is published, citing base effects linked to the revised consumer price index series rather than market price.

According to separate reports, analysts expect January inflation to rise to around 18.98 per cent, reflecting a temporary uptick rather than renewed price acceleration.

Data from the National Bureau of Statistics (NBS) show headline inflation declined to 15.15 per cent year-on-year (YoY) in December 2025, down from 17.33 per cent in November, driven by slower growth in both food and core inflation components.

Research houses broadly expect Nigeria’s headline inflation to rise in January, largely reflecting base effects from the consumer price index (CPI) normalisation rather than renewed price acceleration.

Meristem forecasts January inflation at 18.88 per cent year-on-year, citing continued easing in core price pressures and moderation in month-on-month inflation.

Similarly, FMDA Research projects inflation at 18.98 percent, noting that month-on-month pressures are expected to ease to about 0.40 per cent, and that sustaining a year-on-year decline would require an unusually large negative monthly print of nearly three per cent.

FBNQuest also expects inflation to settle within the 18–19 per cent range, attributing the anticipated uptick to a lower base following the January 2025 CPI normalisation.

Food prices, a key driver of headline inflation, saw notable moderation. Meristerm, in its January inflation forecast, reports that food inflation fell to 10.84 per cent YoY in December, supported by ample supply conditions and lower logistics costs that helped slow the price increases of staples such as maize, sorghum, and paddy rice.

However, analysts at FMDA note that January food price movements were mixed but broadly positive for inflation moderation: maize, millet, rice, gari, and yam all recorded price declines, while some items, such as beans and onions, experienced modest increases. On aggregate, the food price index fell by 1.6 per cent month-on-month, reflecting improved domestic supply and limited pass-through from imported costs.

The Naira appreciated significantly during the period, rising 7.82 per cent YoY in January 2026 to N1,416.52/USD in the official market. This strengthened currency is expected to ease import-related costs and support further moderation in FX-exposed components of the core index.

However, the widening spread between the official and parallel FX markets, with the Naira depreciating slightly in the parallel window, could partially offset these gains, slowing disinflation in certain sectors.