Nigeria Inflation Rate Forecasted to Slow to 13.59% in October
Nigeria’s consumer price index (CPI), which measures headline inflation, is expected to decline for the fifth month in October, driven by sustained swings in global energy costs and a stable exchange rate.
In its pre-inflation report, Coronation Group Limited’s research subsidiary projected inflation would ease to 13.59% year-on-year in October 2026, from 14.63% in September 2026.
The firm also expects the consumer price index to fall month-on-month to 0.02% from 0.06%, marking the fifth consecutive monthly decline in the annual rate and extending the disinflation trend that began in June 2026.
“Our forecast implies a 104bps decline in headline inflation, supported by continued moderation in food prices, relative exchange-rate stability and a favourable base effect.
“Food prices are expected to remain the main source of downward pressure on headline inflation, while core price pressures should also moderate, albeit at a slower pace, reflecting persistent transport, energy and other cost pressures”, the firm said.
The firm said the moderation in headline inflation should not be interpreted as an outright decline in the cost of living. Food inflation remains elevated, while transport and energy costs continue to pose upside risks to underlying price pressures.
Analysts said the October CPI release, expected around 16 November ahead of the MPC meeting scheduled for 23–24 November, will be an important input into the Committee’s assessment of the durability of the disinflation trend.
The investment group said its expectation is anchored on the energy price shock from the ongoing conflict in the Middle East, seasonal movements in food prices, and exchange rate stability.
Food prices are expected to remain the main downward pressure on headline inflation, while core price pressures should also moderate, albeit more slowly, reflecting persistent transport, energy, and other cost pressures.
The oil price shock linked to the Middle East conflict remained a key source of pressure in October. Brent crude averaged $105.69/bbl in October, up from $98.81/bbl in September and the highest monthly average since May ($106.92/bbl).
Prices rose about 14% over the month and settled at $117.64/bbl on 30 October, a five-month high, after Houthi attacks on Saudi Arabia raised fears of further disruption to regional oil supplies.
In Nigeria, the late-August and September rise in petrol prices had already begun to filter through the economy, contributing to the sharp acceleration in monthly core inflation in September.
The temporary N66/litre NNPC discount, in effect through October 31, is expected to cushion consumers and businesses. However, elevated crude oil prices could limit the relief by keeping domestic fuel and transportation costs vulnerable to renewed upward adjustments.
In September, food inflation edged up marginally to 19.59% y/y from 19.57% in August. On a month-on-month basis, however, food inflation fell to -1.55% from 1.02% the previous month, suggesting that increased harvest supply is beginning to lower market prices.
“We expect this to continue in October, as the harvest season improves the supply of farm produce and lowers the prices of several agricultural and perishable items”.
However, transportation costs, insecurity in farming regions, and distribution networks may limit the decline; food inflation remains close to 20% year on year. Analysts said even if food prices decline monthly, households may continue to experience elevated food costs relative to the previous year
The exchange rate should remain an important source of support for the disinflation process. The naira averaged N1,327.67/US$ in September, compared with N1,353.50/US$ in August, providing some relief for imported food, raw materials and other FX sensitive inputs.
The naira remained broadly stable in the first half of October, before coming under modest pressure towards the end of the month.
The exchange rate weakened to N1,367.61/US$ on 26 October before recovering to N1,346.26/US$ by 30 October, despite CBN intervention of about US$2.5bn during the month.
However, continued reserve accumulation and relatively stable FX liquidity should help contain the pass-through of exchange rate pressures to consumer prices
Core inflation, which excludes farm produce and energy, eased to 12.95% y/y in September 2026 from 13.29% in August, its third consecutive monthly decline. On a month-on-month basis, however, core inflation rose to 1.11% from -0.06% in August, its highest monthly reading since June.
While favourable base effects continue to support the annual figure, the monthly rebound deserves close attention. It suggests higher costs are beginning to feed into prices more broadly, as businesses that can no longer absorb them pass them on to consumers.
The increase was broad-based, particularly across services. On a monthly basis, transport inflation rose to 1.47% from -0.52%, education to 1.79% from 0.17%, and restaurants and accommodation services to 0.78% from -0.02%.
With food inflation still around 20% and core monthly inflation showing renewed momentum, the MPC is likely to prioritise preserving price stability over aggressive rate cuts.
However, disinflation may slow from November, as festive-season demand, election-related spending, and potential energy-price pressures begin to weigh on CPI.
The October print will test whether the country is entering a period of sustained disinflation or merely benefiting from favourable base effects and seasonal food supply. Money Market Rates Steady as Excess Liquidity Drops to N6trn
