The Central Bank of Nigeria (CBN) has projected a gradual decline in the inflation rate over the next six months, according to its newly released Inflation Expectations Report for February 2025.
Inflation Trends and Expectations
The report indicates that both businesses and households expect inflation to ease gradually, alongside a reduction in spending over the coming months.
A deeper analysis based on income distribution reveals that households earning above ₦200,000 per month are more optimistic about the moderation of inflation. Their perception is mainly influenced by factors such as:
Energy costs
Exchange rate stability
Transportation expenses
Interest rates
Insecurity
Call for Interest Rate Reduction
The CBN also noted that 65.1% of respondents support a reduction in interest rates, believing it would further ease financial pressure on businesses and consumers.
The National Bureau of Statistics (NBS), in its Consumer Price Index (CPI) report for March 2025, confirmed that inflation dropped to 23.18% year-on-year in February, marking a second consecutive monthly decline from 24.48% in January.
This figure also represents a significant drop of 8.52 percentage points from 31.70% in February 2024, following the adoption of a new CPI rebasing methodology.
What This Means for Nigerians
If the CBN’s projections hold, Nigerians could see lower inflationary pressure in the coming months, potentially leading to improved purchasing power and a more stable economic environment. However, key factors such as exchange rate fluctuations, fuel prices, and security challenges will continue to play a critical role in shaping inflation trends.
