According to expert projections, Nigeria’s headline inflation rate is expected to moderate slightly in May 2025, following a marginal easing in April to 23.71%.
Analysts cite exchange rate stability, lower fuel prices, and slight food price relief in urban centers as the key drivers of this potential decline.
Market insights from Naijaonpoint Research, based on a May 2025 survey in Lagos, suggest the possibility of food inflation cooling.
The report observed price declines in select food items, suggesting that if the trend continues nationwide, food inflation could see further relief.
Head of Research at Afrinvest West Africa, Damilare Asimiyu, predicts headline inflation will ease to 23.5% in May, reflecting stability in the naira, which appreciated in the NAFEM window.
Additionally, a reduction in PMS pump price from N835 to N825/litre by Dangote Refinery is expected to lower business operating costs and boost household purchasing power.
Managing Director at Utica Capital Ltd, Mr. Kanabe Ayegbeni, echoing this sentiment, noted that “the inflationary trends in essential goods and services during May were quite stable,” a development he attributes to the effectiveness of ongoing government policies that have brought some macroeconomic stability.
However, Head of Research at Norrenberger, Samuel Oyekanmi, was optimistic but with a more cautious tone. While he expects a slight moderation in headline inflation due to the base effect and improved FX conditions, he warns that food inflation remains vulnerable.
“Headline inflation in May 2025 is expected to show a slight moderation, primarily due to base effects and relative stability in the exchange rate. The naira appreciated marginally, about 1%, during the month. Despite the expected tapering, food inflation may continue to face upward pressure due to structural challenges. Heightened insecurity and early onset of flooding in key food-producing regions, particularly the Middle Belt, have already begun to disrupt supply chains,” he said, citing a surge above 50% in food inflation in Benue State in April as a red flag.
The inflation outlook for June remains cautiously optimistic, though not without significant downside risks. Sustained foreign exchange stability, steady food supply, and absence of new disruptions from insecurity or adverse weather conditions will be critical to maintaining the disinflation trend.
However, any shocks to energy prices, delayed effects of recent flooding in key farming areas, or further naira depreciation could quickly reverse these gains.