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Cowry Research has projected that Nigeria’s headline inflation will moderate to 17.83 per cent in October 2025, extending the downward trend observed in recent months.
The research firm attributed this expected downward trend primarily to a confluence of stabilising economic factors, especially the relative steadiness of the naira, improvement in foreign exchange (FX) liquidity and a steady inflow of food supply with the country heading to harvest season.
Cowry Research said the factors are anticipated to exert significant downward pressure on the general price level across key consumer categories, thereby contributing to a more subdued inflation environment.
The stability of the naira, which has shown signs of resilience against major currencies in recent weeks, is seen as a crucial element in anchoring inflation expectations.
A stable domestic currency typically cools by reining in the cost of foreign goods and inputs, particularly in an import-reliant economy like Nigeria.
Improved FX liquidity is expected to ease cost pressures on businesses that rely on imported raw materials or capital goods. This, in turn, is expected to reduce the pass-through effect of currency-related costs on consumer prices, helping to ease inflationary pressures across several sectors.
Cowry Research pointed to the harvest season as a key catalyst for sustained food supply across local markets. Given that food inflation constitutes a substantial portion of Nigeria’s consumer price index (CPI) basket, the increased availability of locally-grown agricultural products is likely to dampen food prices.
The seasonal influx of staple crops and fresh produce traditionally helps to counterbalance supply constraints and speculative pricing, thereby acting as a buffer against sharp spikes in food-related inflation.
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However, the firm acknowledged the presence of potential headwinds, particularly the recent upward adjustment in the price of the premium motor spirit (PMS) commonly referred to as petrol.
While fuel price hikes often have a cascading effect on transportation and distribution costs, Cowry Research believed the overall impact on the broader CPI will be relatively muted.
This assessment is based on the relatively low weight of PMS in the official CPI basket used by the National Bureau of Statistics (NBS), suggesting that any cost pressures stemming from the fuel price will be marginal and not sufficient to alter the general downward inflation trend.
Taking these dynamics into consideration, Cowry Research has revised its projection for October 2025 headline inflation, forecasting a further decline to 17.83 per cent.
This forecast represents a continuation of the moderating trajectory observed in recent months and reflects growing optimism that macroeconomic stability, underpinned by policy consistency, improved agricultural output, and foreign exchange management, may be taking root.
As Nigeria grapples with the complex task of stabilising its economy amid external and internal challenges, the forecasted moderation in inflation could provide some relief to consumers and businesses alike.
This is because lower inflation typically translates to improved purchasing power, more predictable business planning, and a generally more conducive environment for economic recovery and growth.
However, Cowry Research’s outlook also underscored the need for sustained vigilance and policy discipline, particularly in managing fuel subsidies, currency interventions, and supply-side support in the agricultural sector, to ensure that the current positive momentum is sustained in the months ahead.