Experts see inflation dropping to 15.84% on bumper harvest

By Chinwendu Obienyi

Nigeria’s headline inflation is expected to ease to 15.84 per cent in October from 18.02 per cent in September as food prices moderate during the main harvest season, analysts at Stanbic IBTC Bank said in a report on Monday.

The bank’s latest Nigeria Purchasing Managers Index (PMI) report projected further moderation in inflation to between 14.25 per cent and 14.62 per cent in November, supported by improved food supply and relative exchange rate stability.

Commenting on the report, Head, Equity Research at Stanbic IBTC, Muyiwa Oni, stated that “Food prices are expected to continue easing in the coming months in line with the ongoing harvest season, which should keep prices at seasonal lows until December.

Oni said that while non-food inflation could see mild pressure from higher fuel prices in October, naira stability and appreciation would help cushion the impact.

Fuel prices may rise slightly due to production challenges at the Dangote Refinery, which supplies about 40 per cent of Nigeria’s domestic petrol, the report noted. However, Stanbic IBTC said the broader inflation outlook remains positive.

The bank added that naira stability and a potential monetary policy easing cycle are likely to boost real sector activity and support medium-term economic growth.

The country’s economy expanded by 4.23 per cent year-on-year in real terms in the second quarter of 2025, according to the National Bureau of Statistics. Stanbic IBTC expects GDP growth of around 4.0 per cent for 2025, driven by manufacturing and services.

The PMI survey, conducted between Oct. 9 and 29, showed that business activity expanded at a faster pace in October, with the headline index rising to 54.0 points from 53.4 in September, marking an 11th straight month of growth.

“The final quarter of 2025 started strongly, with softer price pressures and the launch of new products supporting new orders and output growth, particularly in manufacturing,” Oni said.

Output growth hit a six-month high in October, supported by rising new orders and product launches, the survey added.

Business activity increased across all four broad sectors, led by manufacturing. Softer inflationary pressures helped lift demand, even as companies raised selling prices at a slower pace, the second-weakest rate in more than five years.

While input cost inflation ticked higher due to increased purchase prices and staff costs, the rise remained muted compared to 2023 and 2024, the report said.