Nigeria’s average inflation rate is projected to decline to 15.6% in 2026 from 23.0% in 2025, before easing further to 14.7% in 2027, according to the International Monetary Fund (IMF).
The forecast, contained in the IMF’s October 2026 World Economic Outlook, signals a continued slowdown in price increases as foreign exchange stability and economic reforms support the country’s recovery.
However, the projected decline does not necessarily mean Nigerians will see an immediate reduction in the prices of food, transport, fuel and other essential goods.
The IMF’s October outlook also projects Nigeria’s economy to grow by 4.2% in 2026 and 4.3% in 2027, reflecting expectations of sustained economic expansion despite continuing pressure on household incomes.
The projections suggest that inflation will moderate further, although the pace of improvement will depend on domestic economic conditions and developments in international markets.
Nigeria’s inflation outlook has improved following a period of aggressive monetary tightening, foreign exchange reforms and efforts to expand domestic petroleum refining capacity.
The Central Bank of Nigeria reduced its benchmark interest rate from 26.5% to 23% in September 2026, cutting it by 350 basis points as inflationary pressures eased.
The National Bureau of Statistics subsequently reported that headline inflation declined to 14.63% year-on-year in September 2026 from 15.39% in August.
Despite the moderation, food inflation remained elevated at 19.59% in September, highlighting the continued pressure on household budgets.
The difference between the IMF’s annual-average inflation projection and the NBS’s monthly year-on-year figures is important. The two measures use different calculation periods and should not be treated as directly interchangeable.
Higher domestic refining capacity could also help reduce exposure to imported petroleum products and foreign exchange costs. However, the effect on consumer prices will depend on fuel pricing, distribution costs and movements in other production expenses.
The outlook remains exposed to risks, including higher international energy and fertiliser prices, food supply disruptions and increased fiscal spending ahead of Nigeria’s January 2027 presidential election.
These factors could slow the decline in inflation and limit the relief available to households and businesses.
For Nigerian consumers, the central issue will be whether slower inflation translates into more affordable food, transportation and other necessities.
A lower inflation rate means prices are rising more slowly; it does not automatically mean that prices are falling. After several years of increases, households may continue to face high living costs even as the headline rate declines.
The IMF’s projections therefore point to an improving inflation outlook, but sustained relief will depend on stronger food supplies, stable economic conditions and the extent to which lower inflation feeds through to everyday prices.
