Nigeria’s inflation rate is projected to rise to 32.34% year-on-year in December 2025, as increased festive-season demand and the statistical effect of the rebased Consumer Price Index combine to lift price pressures.
Analysts at Stanbic IBTC Bank also estimate month-on-month inflation at 1.44%, equivalent to a CPI level of 132.34 for the month.
The projection is contained in the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report compiled by S&P Global, which tracks private-sector business conditions.
According to the bank’s research team, the anticipated inflation pickup reflects higher December spending patterns, especially on consumer goods and services, alongside the base-effect impact of the rebased CPI from the same period a year earlier.
This means the year-on-year figure may appear significantly higher than underlying monthly changes alone would imply.
What the report is saying
In his comment in the report, Muyiwa Oni, the Head of Equity Research West Africa at Stanbic IBTC Bank, said, “While overall input prices (64.4 vs November: 61.9) increased sharply in December from the near five-year low posted in November, the rate of inflation was weaker than the 2025 average. Because of this high input cost, selling prices also increased in December, with the most significant price increase seen in the Manufacturing sector.”
He added that the pickup in inflationary pressures in December may be connected to the higher spending patterns associated with the December festive period.
“And so, inflation should increase m/m and y/y in December, although the y/y increase is likely to be significant on account of a low-base effect from the corresponding period of the prior year – an outcome of the country’s rebased CPI.
“Therefore, we estimate inflation at 1.44% m/,m which implies a CPI of 132.34, and y/y headline inflation of 32.34% in December,” he said.
Despite the rising cost outlook, business activity remained positive at the end of 2025. The headline PMI came in at 53.5 in December, only marginally below 53.6 in November, signalling another solid improvement in private-sector operating conditions. A PMI reading above 50 indicates expansion.
December marked the 13th consecutive month of growth, broadly consistent with the year’s average trend. Customer demand strengthened, resulting in another increase in new orders, while output expanded across all four monitored sectors, led by agriculture.
Firms also stepped up purchasing activity and inventory accumulation in response to rising sales.
Employment growth, however, was only marginal and the weakest since June 2025. Businesses also recorded a further rise in unfinished work, attributed to power constraints and material shortages.
Business confidence rebounds strongly
One of the standout developments was a marked improvement in business sentiment, which rose to a six-month high. Around 59% of surveyed firms expect output to rise over the coming year, supported by plans to expand operations, open new branches, and increase export activity.
Suppliers’ delivery times improved again, although at the slowest pace in six months, with some firms citing road challenges, while others reported faster deliveries linked to prompt payments and reduced traffic bottlenecks.
Beyond the immediate inflation picture, the bank’s research team forecasts GDP growth of 3.8% in 2025 and 4.1% in 2026. The manufacturing and services sectors are expected to expand further, supported by government investment programmes, trade-facilitation efforts, and the forward-linkage impact of the Dangote refinery on associated industries.
Stabilising exchange-rate conditions and potential moderation in interest rates, if inflation later trends downward, are also expected to support private consumption and business investment heading into 2026.
What you should know
Nigeria’s headline inflation rate moderated to 14.45% in November 2025, marking a significant slowdown from the 16.05% recorded in October 2025, according to figures released by the National Bureau of Statistics (NBS).
The decline of 1.6 percentage points month-on-month signals easing price pressures across the economy after several months of elevated inflation.
The NBS also noted that headline inflation decreased compared to the same month last year, although this comparison is based on a different base year (November 2009).
