Inflation Rate to Rise by 3.5% in January – AIICO Capital
Nigeria’s headline inflation rate is projected to increase by at least by 3.50% in January following an adjustment in methodology by the statistics office in December 2025.
Ahead of Nigeria’s inflation figure for January 2026, a slew of analysts have projected that the year will open with a steep rise in the consumer price index despite naira stability.
The consumer price index was expected to hit an average of 30% in December, but the statistics office revised its methodology to even out unanticipated distortions in the inflation figure.
Some investment banking firms cried foul, sought an explanation before clarification on the final figure doled out to the public.
Inflation rate settled at 1515% in December, according to consumer data released by the National Bureau of Statistics, the first disinflation after an 8-month deceleration.
In its projection, AIICO Capital Limited said the expected CPI data will show how Nigeria has dealt with an increase in goods and services over the past one-year.
“It is worth noting that in December 2025, the NBS adjusted the rebase methodology to a 12-month moving average. As such, we conducted a pre-CPI report analysis.
“Our findings suggest that the Headline inflation rate will increase faster by a minimum of 350bps to a range of 18.5– 19.5% year on year from 15.15% year on year in December 2025.”
The investment expressed view that the sharp increase will be largely driven by the base-year effect from both the core, which is non-food items price, and food Inflation.
“Our position is based on the base year effect on the components of the headline inflation – Core and Food Inflation, despite improvement in exchange rate, stable energy and food prices”.
The firm said its analysis indicates that core inflation, which reflects changes in the average price of non-farm produce, is expected to ease by a minimum of 10bps to 0.71% – 0.6% m/m and increase by a minimum of 180bps to 20.0% – 32.60% y/y.
The month-on-month easing is expected to be driven by two major factors, Naira appreciation and stable petrol price in January 2025.
Analysts noted that the naira appreciated by 343bps or ₦49.20 per US dollar to ₦1,386.55 per dollar at the official window, and by 102bps or ₦15.00 per dollar to ₦1,460 in the parallel market.
In addition, average petrol prices remain stable at ₦739 per litre in January, before rising to ₦839 per litre in the late part of the month.
Similarly, the food inflation price index, which reflects changes in the average price of farm produce, is expected to increase to a range of 0.02-0.8% m/m and by a minimum of 500bps to a range of 14.0% – 15.90%y/y in January 2026, compared to -0.36% m/m and 10.84%% y/y in December 2025.
“This acceleration would be driven by base year-effect, despite price stability during January. Overall, we expect the base year effect to push the inflation rate to a range of 0.4%-0.7% m/m and 18.5%– 19.5%y/y”, AIICO Capital stated. Zenith Bank Hits Highest Value in 52-Week as Earnings Loom
