Nigeria's annual-average inflation is projected to decline to 15.6 per cent in 2026 before easing further to 14.7 per cent in 2027, according to the International Monetary Fund. This marks a significant slowdown from the 23.0 per cent average inflation recorded in 2025, reflecting a shift in economic conditions after years of elevated price pressures driven by currency swings, supply chain disruptions and macroeconomic imbalances.
The expected cooling reflects several factors working in concert. Exchange rate stability and growing domestic refining capacity are playing central roles in moderating domestic price pressures across supply chains, according to analysis from Coronation Research. Coronation's internal estimate for 2027 annual average inflation sits at 14.56 per cent, closely aligned with the IMF forecast. The firm noted that "while structural headwinds remain, the ongoing economic policy reforms and expanded refining operations provide a strong foundation for steady, long-term price moderation".
However, downside risks could slow the pace of disinflation. Higher energy and fertiliser costs, alongside election-related spending, may constrain how quickly price relief reaches consumers and businesses, Coronation Research warned. High input expenses and local food insecurity continue to present direct threats to household welfare, potentially limiting how effectively broader price stability translates into improved daily living standards for ordinary Nigerians.
Looking ahead, the IMF projects Nigeria's gross domestic product will grow by 4.2 per cent in 2026 and 4.3 per cent in 2027, driven by continued foreign exchange reforms and strong non-oil sector performance. The fund's latest October 2026 World Economic Outlook reflects this updated projection after persistent tight monetary policy combined with a gradually stabilising exchange rate regime has begun easing price pressures across major consumer categories. Coronation Research added that increased local refining capacity has aimed to reduce energy import dependency and temper transportation fuel costs, though lingering supply risks and fiscal pressures continue to pose potential obstacles to the disinflation trend.
For savers, borrowers and businesses in Nigeria, slower inflation means purchasing power should gradually recover and borrowing costs should ease over time, though immediate relief depends on how quickly price pressures actually fall in practice.