IMF Predicts Nigeria's Inflation Will Cool to 15.6% by 2026

Nigeria is set to experience a notable reduction in its average annual inflation rate, with projections indicating a drop to 15.6 percent by 2026, and a further easing to 14.7 percent in 2027. This optimistic outlook comes from the latest economic assessment released by the International Monetary Fund (IMF), signaling a substantial deceleration from the high average of 23.0 percent recorded in 2025.

According to economic experts at Coronation Research, several key macroeconomic stabilization initiatives are actively driving this downward trend in prices. Crucially, improved stability in the foreign exchange market, coupled with an expanding capacity for domestic crude oil refining, is playing a vital role in alleviating persistent price pressures across various supply chains within the country.

Despite this positive trajectory towards lower inflation, the pace of relief for Nigerian businesses and consumers could be tempered by ongoing risks. In their review of the economic landscape, Coronation Research observed, "Exchange rate stability and increased domestic refining capacity could help moderate price pressures. However, higher energy and fertiliser costs, alongside election-related spending, may slow the pace of disinflation." Furthermore, elevated input costs and challenges related to local food security continue to directly threaten overall household well-being, potentially limiting how quickly macro-level disinflation translates into tangible improvements in everyday living standards.

Looking ahead, the IMF forecasts Nigeria's Gross Domestic Product (GDP) to expand by 4.2 percent in 2026 and 4.3 percent in 2027. This growth is expected to be fueled by ongoing foreign exchange reforms and robust performance within the non-oil sectors of the economy. Analysts from Coronation Asset Management largely align with these projections, noting that their own internal estimate for the 2027 annual average inflation rate, at 14.56 percent, is very close to the multilateral lender's forecast. An analyst remarked, "While structural headwinds remain, the ongoing economic policy reforms and expanded refining operations provide a strong foundation for steady, long-term price moderation."

In recent years, Nigeria has grappled with significant price escalations, stemming from macroeconomic imbalances, volatility in the foreign exchange market, and disruptions in global supply chains. Following a series of decisive policy interventions, including adjustments to the foreign exchange market and structural economic reforms designed to boost non-oil production, the government's focus has now shifted towards re-establishing price stability and stabilizing the national currency.

The updated October 2026 World Economic Outlook from the International Monetary Fund, along with complementary analyses from Coronation Research, provides a fresh perspective on the nation's economic trajectory. After annual-average inflation climbed to an estimated 23.0 percent in 2025, a combination of sustained tight monetary policy and a progressively stabilizing foreign exchange regime has begun to ease price pressures across key consumer categories. The report further stated, "Increased local refining capacity has further aimed to reduce energy import dependency and temper transportation fuel costs. However, lingering supply risks, higher agricultural input costs, and fiscal pressures continue to pose potential risks to the broader disinflation trend."