World Bank Projects Nigeria’s Inflation Rate To Drop To 22.1% In 2025
The World Bank has forecast that Nigeria’s inflation rate will average 22.1 per cent in 2025 due to the Central Bank of Nigeria’s tight monetary policies.
The projection, published on Monday on the World Bank’s website, followed the launch of its latest Nigeria Development Update report in Abuja.
Titled “Building Momentum for Inclusive Growth”, the report assessed recent economic trends and policy actions, noting that while GDP growth, revenue mobilisation, and fiscal consolidation have improved, inflation remains a challenge.
According to the report, “The report further adds that inflation has remained high and sticky but is expected to fall to an annual average of 22.1 per cent in 2025, as a sustained tight stance firmly establishes monetary policy credibility and dampens inflationary expectations.”
It identified key contributors to high inflation as petrol subsidy removal, exchange rate unification, rising energy and logistics costs, and disruptions to food supply.
Despite this, the World Bank observed signs of relief, stating that Nigeria’s macroeconomic conditions are gradually improving.
The economy reportedly grew by 4.6 per cent year-on-year in Q4 2024, with an annual growth of 3.4 per cent — the best since 2014, excluding the post-COVID period.
Nigeria’s fiscal deficit dropped from 5.4 per cent of GDP in 2023 to 3.0 per cent in 2024.
Total government revenue rose significantly from N16.8tn in 2023 to N31.9tn in 2024, representing 11.5 per cent of GDP.
“Nigeria has made impressive strides to restore macroeconomic stability. With the improvement in the fiscal situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending; investing more in human capital, social protection, and infrastructure,” said Acting World Bank Country Director for Nigeria, Taimur Samad.
He added, “The allocation of public resources should move away from past unsustainable patterns and be redirected towards addressing critical development gaps.”
World Bank Lead Economist for Nigeria, Alex Sienaert, said, “International experience suggests that the public sector cannot sustainably generate growth and jobs by itself. Nigeria is no exception.”
He added, “A useful strategy is to position the public sector to play a dual role as a provider of essential public services… and as an enabler for the private sector to invest, innovate, and grow the economy.”
The report noted that Nigeria’s headline inflation climbed to 24.23 per cent in March 2025, up from 23.18 per cent in February, according to the National Bureau of Statistics.
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