Nigeria’s annual average inflation rate is projected to drop to 15.6 per cent in 2026 and decline further to 14.7 per cent in 2027, according to the International Monetary Fund (IMF).
The forecast represents a significant decrease from the 23.0 per cent average inflation recorded in 2025.
Economic analysts at Coronation Research attributed the anticipated slowdown to ongoing macroeconomic stabilisation measures, particularly improved exchange rate stability and expanding domestic refining capacity, which are helping to ease price pressures across supply chains.
However, despite the expected decline, several risks could slow the pace of inflation reduction and limit relief for households and businesses.
In its assessment of the economic outlook, Coronation Research stated, “Exchange rate stability and increased domestic refining capacity could help moderate price pressures. However, higher energy and fertiliser costs, alongside election-related spending, may slow the pace of disinflation”.
Rising production costs and persistent food insecurity also remain major challenges, threatening household welfare and limiting the benefits of declining inflation on living standards.
Meanwhile, the IMF expects Nigeria’s gross domestic product (GDP) to grow by 4.2 per cent in 2026 and 4.3 per cent in 2027, supported by continued foreign exchange reforms and strong performance in the non-oil sector.
Analysts at Coronation Asset Management also expressed confidence in the projections, noting that their 2027 annual average inflation estimate of 14.56 per cent is close to the IMF’s forecast.
“While structural headwinds remain, the ongoing economic policy reforms and expanded refining operations provide a strong foundation for steady, long-term price moderation”, an analyst said.
Nigeria has experienced persistently high inflation in recent years, driven by economic imbalances, foreign exchange volatility and disruptions to international supply chains.
In response, authorities have introduced several policy measures, including foreign exchange market adjustments and structural reforms designed to strengthen domestic production, particularly in the non-oil sector.
Tighter monetary policy and gradual stabilisation in the foreign exchange market have also contributed to easing price pressures across major consumer categories.
The expansion of domestic refining operations is expected to reduce reliance on imported petroleum products and help contain fuel and transportation costs.
However, the report warned that supply challenges, rising agricultural input expenses and fiscal pressures could undermine the expected downward trend in inflation.
The latest October 2026 World Economic Outlook update by the IMF, alongside Coronation Research’s analysis, provides an updated assessment of Nigeria’s economic prospects.
Despite the projected improvements, the extent to which lower inflation will ease the financial burden on Nigerians will depend on developments in food prices, energy costs and overall economic conditions.
