Inflation hits 16.1%, marking 7th consecutive decline

..as CPPE calls for structural reforms to sustain relief

By Seun Ibiyemi

Nigeria’s inflation rate continued its downward trajectory in October 2025, dropping for the seventh consecutive month to 16.1 percent, according to the latest data released by the National Bureau of Statistics (NBS). 

The figure came in lower than many analysts had forecast, reinforcing expectations of improved price stability and a potentially more accommodative monetary policy stance.

The October inflation rate represents a significant easing from the 18.02 percent recorded in September. 

The NBS noted that Nigeria’s inflation performance showed marked improvement compared to the same period last year, with headline inflation standing at 17.82 percent year-on-year well below the 33.88 percent posted in October 2024. This decline is partly attributed to a revised base year adopted by the Bureau.

On a month-on-month basis, headline inflation rose to 0.93 percent, up by 0.21 percentage points from the 0.72 percent recorded in September, indicating a slight increase in the pace of price changes between the two months.

Urban inflation slowed sharply to 15.65 percent in October 2025 from 36.38 percent a year earlier. Month-on-month, urban inflation rose to 1.14 percent, compared with 0.74 percent in September. 

The twelve-month average inflation rate for urban areas also dipped to 22.68 percent, down from 34.52 percent in October 2024.

Rural inflation followed a similar trend, easing to 15.86 percent year-on-year compared to 31.59 percent in October 2024. 

Month-on-month, rural inflation fell to 0.45 percent from 0.67 percent in September, while the twelve-month average inflation rate moderated to 20.81 percent, down from 30.24 percent in the same month last year.

Food inflation, a closely watched component due to its impact on household welfare, slowed to 13.12 percent year-on-year in October down sharply from 39.16 percent recorded in October 2024. 

The NBS said this drop was largely influenced by the change in the base year used in the calculations.

Despite the annual decline, month-on-month food inflation rose by -0.37 percent, compared with the -1.57 percent recorded in September. 

The NBS attributed the monthly uptick to increases in the prices of key food items including fresh onions, oranges, pineapples, shrimp, groundnuts, leafy vegetables such as ugu and okazi, and various meat products such as goat meat, cow tail, and liver.

The twelve-month average food inflation rate also moderated significantly to 21.96 percent, down by 16.16 percentage points from 38.12 percent in October 2024.

With inflation slipping well below forecasts and continuing its consistent decline, economists say the Central Bank of Nigeria now has greater flexibility to consider easing interest rates in the months ahead. 

The lower inflation print offers potential relief for households and businesses that have struggled with high borrowing costs and elevated prices in recent years.

The latest inflation figures are expected to shape the tone of upcoming monetary policy discussions, even as concerns remain over food supply pressures and exchange rate volatility.

Analysts at CardinalStone projected further moderation in inflation, as the drivers that were obtainable in September 2025 are likely to persist.

This deceleration was driven by declines in both food and core inflation. Particularly, food inflation dropped to 13.1 per cent year-on-year in October from 16.87 in September 2025, attributed to softer prices of staples such as Maize, Garri, Beans, Eggs, and Tomatoes. Similarly, core inflation slumped to 18.7 per cent in October 2025 from 19.53 per cent in September 2025.

However, on a MoM basis, headline inflation scaled by 0.9 per cent from  0.7 per cent recorded in the prior period.

Analysts at Meristem projected food inflation to ease further in the near term, supported by the ongoing harvest season and government food security interventions.

“However, festive season demand and recent PMS price adjustments due to union strikes could temper the pace of disinflation. Core inflation should remain broadly stable amid sustained FX stability, though risks from global energy and trade disruptions persist. 

Overall, headline inflation is projected to maintain its downward trajectory in the short term, underpinned by ongoing disinflationary forces,” it said.

It said that the softer inflation outlook reinforces the case for additional monetary easing by the CBN at its November policy meeting. “We expect a 100bps reduction in MPR to 26.0 per cent.”

The Monetary Policy Committee is set to meet on the 24th and 25th of this month to determine the country’s benchmark interest rate.

Reacting to the drop, analysts and policy experts have described the development as a positive sign of macroeconomic stabilization, but caution that underlying structural pressures continue to limit real gains for households.

According to the Centre for the Promotion of Private Enterprise (CPPE), the decline was driven largely by base effects from last year’s high inflation, improved exchange rate stability, and better macroeconomic coordination, including monetary and fiscal measures. Food and core inflation indices also moderated, signaling a broad-based easing.

However, CPPE warn that inflation remains elevated in sectors crucial to daily living, food, transportation, housing, utilities, education, and health which together account for 84% of the inflationary burden.

 “While the headline numbers are encouraging, households still face persistent cost pressures in essential areas,” said Dr. Muda Yusuf, CEO of CPPE.

Structural factors such as high logistics and energy costs, climate-related agricultural disruptions, insecurity in rural areas, and limited access to affordable credit were highlighted as ongoing constraints. 

He note that these challenges could slow the translation of headline disinflation into tangible improvements in purchasing power.

“Disinflation is a welcome signal of policy effectiveness,” said an economist at a leading financial think tank, “but sustaining it requires targeted interventions in food supply, transportation, energy, and housing to ensure ordinary Nigerians feel the relief at the household level.”

The CPPE has recommended a range of policy measures, including climate-resilient agriculture, expanded affordable financing for SMEs and farmers, transport and energy infrastructure upgrades, and improved cross-agency policy coordination.

He also pointed to exchange rate stability and improved investor sentiment as contributing factors, while cautioning that month-on-month inflation pressures indicate some residual supply-side frictions.

Overall, the October disinflation has been welcomed as a sign that coordinated reforms are beginning to take effect, but experts emphasize that structural reforms will be critical to consolidate gains and ensure lasting reductions in the cost of living for Nigerian households.