April Headline inflation will rise to 24.82%
The National Bureau of Statistics (NBS) is scheduled to publish its inflation data for April on Thursday, May 15. Based on our Lagos market survey and econometric model, our findings suggest a likely uptick in headline inflation to 24.82% (margin of ±0.5%).
This increase will be mainly due to the impact of a depreciating Naira on domestic prices and the impact of the planting season on aggregate supply. The effect of the Easter season on prices was relatively unnoticed. The cumulative effect of the telecom and petrol price increases also contributed to the rise.
Annual core inflation is projected to rise by 0.9% to 25.33%, driven largely by structural bottlenecks, rising power costs, and elevated logistics expenses. In contrast, annual food inflation is expected to decline by 0.35% to 21.44%, indicating a moderation in the rate of increase in food prices compared to the same period last year.
Month-on-month inflation – Moving in the same direction
In line with the annual trend, month-on-month inflation—a more accurate reflection of current price movements—is projected to rise slightly by 0.06% to 3.96% (annualized at 60.12%). Also, core and food inflation are expected to rise to 3.97% and 2.58%, respectively.
The IMF projection of 30% inflation is pessimistic
The IMF had earlier projected an end-of-year inflation rate of 30% and 37% in 2026, a figure considered excessive and overly pessimistic by many analysts. However, the recent increase in global oil prices, now approximately $65pb, could provide some fiscal relief and potentially ease inflationary pressures. However, the World Bank, in its recent projections, posits an average inflation rate of 22% at the end of 2025.
CBN – Likely to maintain the status quo
The Monetary Policy Committee (MPC), whose mandate is to control prices, is likely to maintain the status quo at its upcoming meeting on May 19 and 20.
Download and follow the link below to read the full analysis and insights from the FDC Think Tank on the broader economic implications of April’s inflation numbers.
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