Inflation comes in at highest level since May 1996 in January

Inflation came in at 29.9% in January, up from December’s 28.9%. January's figure represented the highest inflation rate since May 1996. The result was largely driven by a faster increase in food prices. In addition, price pressures for housing and energy rose at a stronger pace. The trend pointed up, with annual average inflation coming in at 25.3% in January (December: 24.7%). Meanwhile, core inflation rose to 23.4% in January, from the previous month's 23.1%. Finally, consumer prices increased 2.64% in January over the previous month, picking up from December's 2.29% rise. January's figure was the highest reading since August 2023.

Our panelists have upgraded their inflation forecasts for 2024 after the Central Bank devaluated the currency on 30 January. Inflation is now forecast to average above last year’s levels. Further upwards revisions are still on the cards.

Analysts at the EIU commented on the outlook: “Given the pace of month-on-month increases in prices, deeply negative real interest rates and the large currency devaluation implemented in early February, annual average inflation will climb further in 2024, to average of 28.5%, from an annual rate of 24.7% in 2023.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Nigerian inflation projections for the next ten years from a panel of 22 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Nigerian inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Nigerian inflation projections.

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