Analysts Predict 18% Inflation Rate for January 2026

By Adedapo Adesanya

Analysts have projected that Nigeria’s headline inflation could rise to about 18 per cent in January, defying the downward trend recorded in 2025.

The forecast comes ahead of the first Consumer Price Index (CPI) data release by the National Bureau of Statistics (NBS) of 2026 due on Monday.

Headline inflation closed December at 15.15 per cent year-on-year, while the annual average eased sharply to 23.33 per cent from 33.18 per cent in 2024.

According to analysts at Cowry Research, the recent CPI normalisation has created a lower base for January comparisons, making a temporary uptick in headline inflation likely in January and possibly February. It projects inflation to trend within the 17.8 per cent to 18.7 per cent range in 2026, driven by election-related spending pressures and fading base effects, even as structural reforms support a medium-term disinflation path.

Similarly, analysts at Quest Merchant Bank said the lower base effect could push January inflation to around 18 per cent to 19 per cent. They, however, expect inflation to resume a broadly disinflationary trajectory over the course of the year, supported by softer energy prices, stable exchange rate conditions and easing food costs.

Last year’s deceleration was driven largely by base effects after the stats office normalised its CPI computation methodology. Unlike previous rebasing exercises that used a single month as the base period, the agency calculated the base using the average of all months in 2024. The rebasing also involved reweighting several categories and expanding the inflation basket to 934 items from 740.

In December alone, the NBS published two separate inflation figures for December after the CPI methodology tweaking caused the headline rate to more than double.

Nigeria’s inflation data are closely monitored by the Central Bank of Nigeria (CBN) as it transitions toward an inflation-targeting monetary policy framework.

The CBN has already factored in the CPI rebasing and related computational issues in its three-year inflation forecast.

The apex bank is targeting a slowdown in inflation to around 13 per cent by next year, despite current price pressures and statistical adjustments.

The Monetary Policy Committee (MPC) will meet next week, and today’s inflation report will form the basis for whether there will be a cut or hold in the interest rates.