The International Monetary Fund (IMF) has projected a significant drop in Nigeria’s inflation rate, forecasting it to decrease to 23 per cent by 2025 from the current 33.2 per cent recorded in March 2024. This announcement was made during the Global Economic Outlook presentation at the International Monetary Fund/World Bank Spring Meetings.

Daniel Leigh, the Division Chief of the IMF Research Department, attributed the spike in inflation to Nigeria’s economic reforms, particularly the two exchange rate adjustments implemented. Despite the current challenges, Leigh remains optimistic about Nigeria’s economic growth, predicting a rise from 2.9 per cent in the previous year to 3.3 per cent in 2024.

“Inflation has seen an uptick due to the reforms and exchange rate adjustments, leading to a pass-through effect on imported goods and other commodities. However, we anticipate a gradual decline in inflation to 23 per cent next year, followed by a further decrease to 18 per cent in 2026,” Leigh stated.

The recent consumer price index and inflation report released by the National Bureau of Statistics revealed a sharp increase in food inflation, reaching 40.01 per cent in March. Despite these challenges, the IMF’s projections offer a glimmer of hope for Nigeria’s economic outlook in the coming years.