Nigeria’s inflation rate is projected to climb to 32.34 per cent year-on-year in December 2025, driven by stronger festive-season spending and the statistical impact of the rebased Consumer Price Index, according to analysts at Stanbic IBTC Bank. The bank also estimates month-on-month inflation at 1.44 per cent, translating to a CPI level of 132.34 for the month.
The projection was published in the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index report compiled by S&P Global, which tracks private-sector business conditions. Analysts said the expected rise reflects higher December consumption, particularly for goods and services, combined with a low base effect from the same period last year following the CPI rebasing. As a result, the year-on-year inflation figure is expected to appear elevated relative to the underlying monthly price movement.
The Head of Equity Research West Africa at Stanbic IBTC Bank said input prices rose sharply in December compared with November, although the pace of inflation remained weaker than the 2025 average. He noted that higher input costs pushed selling prices upward, with manufacturing recording the steepest increases, a trend that continues to pressure margins for producers and small businesses.
He added that the seasonal spike in consumer spending during the festive period likely contributed to the pickup in inflationary pressures. According to the bank’s estimates, inflation rose on both a monthly and annual basis in December, with the year-on-year increase amplified by the rebased CPI, rather than a sudden acceleration in monthly price growth.
Despite the inflation outlook, business activity remained resilient at the end of 2025. The headline PMI stood at 53.5 in December, only slightly below November’s 53.6, indicating continued expansion in private-sector activity. December marked the thirteenth consecutive month of growth, supported by stronger customer demand and rising new orders. Output expanded across all monitored sectors, led by agriculture, while firms increased purchasing activity and inventories to meet higher sales.
Employment growth, however, was subdued and the weakest since mid-2025, suggesting cautious hiring amid cost pressures. Businesses also reported a buildup of unfinished work, linked largely to power supply challenges and material shortages, factors that continue to weigh on productivity, particularly for MSMEs.
Business confidence improved significantly, rising to a six-month high. A majority of surveyed firms expect output to increase over the next year, citing plans to expand operations, open new locations and grow export activity. Improved supplier delivery times also supported operations, although progress slowed slightly due to infrastructure and logistics constraints in some areas.
Looking beyond inflation, Stanbic IBTC Bank forecasts Nigeria’s GDP growth at 3.8 per cent in 2025 and 4.1 per cent in 2026. Manufacturing and services are expected to remain key growth drivers, supported by government investment initiatives, trade facilitation and the spillover effects of domestic refining capacity on related industries.
For MSMEs, the outlook suggests a mixed environment. While rising costs remain a near-term challenge, stabilising exchange rates and the possibility of easing interest rates if inflation trends lower could support consumption and business investment in 2026.
Official data show that Nigeria’s headline inflation moderated to 14.45 per cent in November 2025, down from 16.05 per cent in October, according to the National Bureau of Statistics. The decline signalled easing price pressures at the time, although comparisons with earlier periods are influenced by differences in CPI base years.
