Nigeria may be getting some breathing space on prices but the economy’s recovery appears to be losing momentum, according to the latest outlook.
Economist Bismarck Rewane, CEO of Financial Derivatives Company (FDC), now expects headline inflation to drop to 15.3 percent by November 2025, marking what would be the eighth straight month of disinflation.
Meanwhile, growth in real output appears to be slowing third-quarter Gross Domestic Product (GDP) is projected to come in around 3.9–3.96 percent, down from 4.23 percent in Q2.
Recent official data shows prices have indeed started to ease: headline inflation fell to 16.05 percent in October 2025 from 18.02 percent in September, driven largely by a sharp drop in food inflation as staple items such as garri, rice and beans became more affordable.
Food-price inflation dropped to 13.12 percent, the lowest in months, as harvests improved supply and the currency stabilized.
Still, the decline may not be permanent. Rewane warns that some of the drop reflects statistical “base-year effects,” which may fade meaning prices could rebound if underlying economic pressures persist. Structural constraints remain a threat: supply-chain bottlenecks, dependence on imports for food and fuel, and persistent infrastructure gaps continue to push up costs of essential goods.
On the growth side, the projected moderation to about 3.9–3.96 percent in Q3 represents a clear slowdown compared to the 4.23 percent expansion recorded in Q2. That earlier growth was driven by gains in both oil and non-oil sectors as oil output surged to around 1.68 million barrels per day, while the non-oil sector also posted meaningful gains.
But current signals suggest a cooling of that momentum. The delayed impact of tighter monetary policy, volatility in global oil markets, and softer investor sentiment have all weighed down growth prospects.
According to Rewane, even though aggregate GDP numbers still look positive, many Nigerians may feel little benefit: employment, real incomes, and household purchasing power remain under strain.
For households, the easing of inflation could bring some relief cheaper staple foods and lower living-cost pressure could ease burdens on many families. However, unless structural reforms take hold, those gains may prove temporary.
For businesses and investors, lower inflation may reduce uncertainty and cost pressures, but weakening growth could hurt demand, limiting expansion plans.
For policymakers, the current moment could be a window to cautiously ease borrowing costs but only if reforms in agriculture, manufacturing, supply chain infrastructure and fiscal management are aggressively pursued.
In essence, what the data reveals is a mixed economic picture: signs of stabilisation on prices, but a slowdown in growth. For Nigeria to convert this fragile stability into sustained prosperity, deeper structural fixes will be needed.
Inflation Eases to 15.3% — But Economic Growth Slows to 3.96% in Q3
