Nigeria’s average inflation rate will fall to 15.6 per cent this year and slow further to 14.7 per cent in 2027, the International Monetary Fund has projected. The forecast, contained in the Fund’s October 2026 World Economic Outlook, would be a marked drop from the estimated 23.0 per cent average recorded in 2025. Coronation Research, which reviewed the projections, said a steadier exchange rate and rising local refining capacity were helping to cool prices, but warned that the road down may not be smooth.
The IMF outlook, titled “Resilience Under Strain, Urgent Choices”, was released on October 13 at the Fund and World Bank annual meetings in Bangkok, Thailand. It raised Nigeria’s 2026 growth forecast to 4.2 per cent from the 4.1 per cent projected in July, and kept the 2027 figure at 4.3 per cent. The Fund estimates that the economy grew by 4.0 per cent in 2025, and attributes the improved outlook to foreign exchange reforms and stronger non-oil activity.
Official data suggest the inflation target is within reach. The National Bureau of Statistics said headline inflation fell to 14.63 per cent in September 2026, down from 15.39 per cent in August and 20.98 per cent in September 2025. Month on month, the general price level rose by just 0.06 per cent, against 0.71 per cent in August.
The bureau’s 12-month average inflation rate stood at 15.80 per cent at the end of September, compared with 27.31 per cent a year earlier. That figure is already close to the IMF’s full-year projection of 15.6 per cent. For the forecast to hold, price increases in the final quarter would need to remain modest, a period that includes year-end festive demand and the build-up to the 2027 general elections.
Food remains the stubborn part of the picture. The NBS put food inflation at 19.59 per cent in September, marginally above the 19.57 per cent recorded in August, even though food prices fell by 1.55 per cent month on month. Core inflation, which excludes farm produce and energy, eased to 12.95 per cent from 13.29 per cent. At state level, Lagos recorded the highest food inflation at 34.40 per cent, followed by Imo at 33.79 per cent and Ondo at 31.49 per cent.
Coronation Research identified both the drivers and the dangers. Its analysts credited exchange rate stability and expanded domestic refining for easing pressure across supply chains. They cautioned, however, that higher energy and fertiliser costs, together with election-related spending, “may slow the pace of disinflation”. Coronation Asset Management puts its own 2027 average inflation estimate at 14.56 per cent, close to the IMF’s projection.
Energy costs are the clearest threat. Petrol, which sold for about ₦830 per litre in parts of the country before the Middle East conflict escalated in February, now averages around ₦1,400 after crude climbed above $100 per barrel. Dangote Petroleum Refinery raised its gantry price to ₦1,350 per litre on September 12, its fourth increase since August 21. The Federal Government has since announced a 30-day discount at NNPC stations and says it is negotiating a ₦1,350 ceiling on the landing cost of petrol.
The global backdrop is not helping. The IMF projects world inflation to rise from 4.1 per cent in 2025 to 4.7 per cent in 2026, driven by higher energy and food prices, before easing to 4.1 per cent in 2027. That places Nigeria’s projected slowdown against a tide moving in the opposite direction elsewhere.
The Fund also raised concerns about household welfare. Deniz Igan, who heads the world economic studies division of the IMF’s research department, said that while growth had held up in Nigeria as an energy exporter, “poverty risks are still very high”. She noted that food and energy costs were rising disproportionately, making it harder for vulnerable households to cope, and the Fund urged targeted, temporary support for those most affected.
On monetary policy, the IMF backed the Central Bank of Nigeria’s data-driven approach to fighting inflation. It suggested that a less restrictive stance could eventually become appropriate, provided incoming data continue to support such a move. The CBN has held its monetary policy rate at 26.5 per cent.
Both the IMF and Coronation analysts point to the same variables in the months ahead: food supply, fuel prices and the level of public spending as the 2027 elections approach. The NBS October inflation report, due in November, will be the first to reflect the fuel price discount and the latest round of pump price changes.