Nigeria Inflation Rate YoY: November 2025 Analysis and Outlook
Key Takeaways: Nigeria’s inflation rate eased to 16.05% YoY in November 2025, down from 18.02% in October and well below the 17.50% consensus estimate. This marks the lowest inflation reading since May 2024, reflecting sustained disinflationary momentum amid tightening monetary policy and easing food prices. However, inflation remains elevated relative to the Central Bank of Nigeria’s (CBN) 6-9% target range, underscoring persistent structural challenges. External shocks and fiscal pressures continue to pose risks, while financial markets show cautious optimism. Forward-looking scenarios suggest a gradual return to single-digit inflation by mid-2026, contingent on policy consistency and geopolitical stability.
Table of Contents
Nigeria’s headline inflation rate for November 2025 registered at 16.05% year-on-year (YoY), marking a notable decline from October’s 18.02% and continuing a downward trend from a peak of 23.71% in May 2025, according to the Sigmanomics database. This easing reflects a combination of improved food supply chains and the impact of monetary tightening by the Central Bank of Nigeria (CBN). Despite this progress, inflation remains nearly double the CBN’s target band of 6-9%, indicating ongoing macroeconomic vulnerabilities.
Drivers this month
- Food inflation eased by 2.50 percentage points, driven by improved harvests and supply chain normalization.
- Energy prices stabilized following global oil price corrections, reducing transportation and utility cost pressures.
- Core inflation components, including housing and services, remained sticky, contributing to a slower overall disinflation pace.
Policy pulse
The current inflation reading remains above the CBN’s target range, but the downward trajectory supports the central bank’s recent decision to maintain a restrictive monetary stance. The Monetary Policy Rate (MPR) has held steady at 18%, signaling commitment to price stability despite growth headwinds.
Market lens
Immediate reaction: The NGN/USD exchange rate appreciated 0.30% within the first hour post-release, reflecting improved investor confidence. Sovereign bond yields edged lower by 10 basis points, while the NSE All-Share Index showed modest gains.
The inflation rate’s decline aligns with broader macroeconomic indicators signaling gradual stabilization. GDP growth projections for 2025 hover around 2.50%, supported by agriculture and services sectors. Unemployment remains elevated at 14.20%, constraining wage-driven inflation pressures. The fiscal deficit widened slightly to 4.80% of GDP in Q3 2025, reflecting increased government spending on infrastructure and social programs.
Monetary Policy & Financial Conditions
The CBN’s tight monetary policy, including high interest rates and liquidity management, has helped temper inflation expectations. Banking sector liquidity tightened, with credit growth slowing to 5.10% YoY. The naira’s managed float regime continues to balance external pressures and domestic stability.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with a 2025 budget deficit target of 4.50% of GDP. Increased capital expenditure aims to boost productivity but risks fueling inflation if not matched by revenue gains. Oil revenue volatility continues to challenge fiscal sustainability.
External Shocks & Geopolitical Risks
Global commodity price fluctuations and regional security concerns in the Niger Delta and northern states pose downside risks to inflation and growth. The recent easing of oil prices has helped reduce imported inflation pressures, but geopolitical tensions could disrupt supply chains.
Drivers this month
- Food inflation contribution: -1.20 percentage points YoY
- Energy prices contribution: -0.50 percentage points YoY
- Core inflation steady at ~12.50% YoY
Policy pulse
The inflation trajectory supports the CBN’s cautious approach, maintaining the MPR at 18%. Inflation expectations have moderated but remain above target, requiring continued vigilance.
Market lens
Immediate reaction: NGN/USD strengthened by 0.30%, Nigerian sovereign bonds rallied, and the NSE All-Share Index gained 0.50% within hours of the release, reflecting positive sentiment.
This chart confirms Nigeria’s inflation is trending downward, reversing a six-month rise. However, core inflation’s persistence signals that structural reforms remain essential to achieve sustainable price stability.
Looking ahead, Nigeria’s inflation outlook depends on several factors, including monetary policy consistency, fiscal discipline, and external conditions. The base case scenario projects inflation falling to 12-14% by Q2 2026, assuming stable oil prices and continued monetary tightening.
Bullish scenario (20% probability)
- Inflation drops below 10% by mid-2026.
- Strong agricultural output and improved supply chains.
- Fiscal consolidation reduces inflationary pressures.
Base scenario (60% probability)
- Inflation gradually declines to 12-14% by mid-2026.
- Monetary policy remains tight but flexible.
- Moderate external shocks and stable oil prices.
Bearish scenario (20% probability)
- Inflation remains above 16% through 2026.
- Geopolitical tensions disrupt supply chains.
- Fiscal slippage and currency depreciation fuel inflation.
Nigeria’s November 2025 inflation reading of 16.05% YoY signals meaningful progress in taming price pressures but underscores the need for sustained policy efforts. The interplay of monetary restraint, fiscal management, and external factors will shape the inflation path. Financial markets have responded positively, yet risks remain from structural bottlenecks and geopolitical uncertainties. Investors and policymakers should monitor inflation dynamics closely as Nigeria navigates toward more stable macroeconomic conditions.
Key Markets Likely to React to Inflation Rate YoY
Nigeria’s inflation data typically influences currency, bond, equity, and commodity markets. The following tradable symbols have shown historical sensitivity to inflation shifts, reflecting their economic or financial linkages to Nigeria’s macro environment.
- USDNGN – The USD/NGN exchange rate reacts sharply to inflation surprises, impacting import costs and monetary policy.
- NGSEASI – Nigeria’s All-Share Index reflects investor sentiment tied to inflation and economic growth prospects.
- MRCO.L – A major Nigerian consumer goods stock sensitive to inflation-driven input cost changes.
- NGNUSDT – Stablecoin pair reflecting demand for NGN liquidity amid inflation volatility.
- EURNGN – Euro to Naira exchange rate, influenced by inflation and trade balances.
Inflation Rate vs. NGSEASI Since 2020
Since 2020, Nigeria’s inflation rate and the NGSEASI have exhibited an inverse relationship during inflation spikes. For example, the 2021 inflation surge to 18.20% coincided with a 12% drop in the NGSEASI. Conversely, periods of disinflation, such as late 2025, have supported modest equity gains. This dynamic highlights inflation’s critical role in shaping market sentiment and investment flows in Nigeria.
FAQs
- What is the current inflation rate YoY for Nigeria?
- The latest inflation rate for Nigeria is 16.05% year-on-year as of November 2025.
- How does Nigeria’s inflation compare historically?
- Inflation has declined from a peak of 23.71% in May 2025 to 16.05% in November, reflecting easing price pressures but remaining elevated.
- What factors influence Nigeria’s inflation rate?
- Key drivers include food and energy prices, monetary policy, fiscal spending, exchange rate movements, and external shocks.
Final Takeaway: Nigeria’s inflation is on a clear downward path but remains above target, requiring continued policy vigilance and structural reforms to ensure sustainable price stability.
The November 2025 inflation rate of 16.05% YoY compares favorably to October’s 18.02% and is significantly below the 12-month average of 20.70%. This marks a steady decline from the peak of 23.71% recorded in May 2025, illustrating a sustained disinflation trend over six months.
Food and energy price moderation have been the primary contributors to this easing, while core inflation components remain elevated. The pace of decline, averaging 1.30 percentage points per month since May, suggests improving price stability but highlights persistent structural inflation drivers.