Ahead of the release of the August inflation data, Coronation Asset Management, in its inflation outlook, has projected a continued decline driven by foreign exchange stability and the harvest season.

The National Bureau of Statistics is expected to publish the inflation report for August on Monday (today), with inflation expected to continue to decelerate and hit five months of dips.

Nigeria’s inflation rate declined for the fourth consecutive month in

July 2025, settling at 21.88 per cent year-on-year, down from 22.22 per cent in June. Compared to July 2024, when the rate stood at 33.40 per cent, this represented an 11.52 percentage point drop, signalling some economic relief.

Food inflation presented a mixed trend as it stood at 22.74 per cent year-on-year in July, compared to 39.53 percent in the same month last year.

Every month, food prices rose 3.12 per cent, slightly below the 3.25 per cent recorded in June. The moderation was driven by falling average prices of key staples such as vegetable oil, white beans, local rice, maize, and wheat flour.

Core inflation, which excludes volatile agricultural items and energy, slowed to 21.33 per cent in July from 27.47 per cent a year earlier. Month-on-month, it fell to 0.97 per cent from 2.46 per cent in June, reflecting easing price pressures in non-food categories.

Coronation Asset Management, in its inflation outlook, projected that in August, headline inflation would ease 21.45 per cent y/y, and on a month-on-month basis, it anticipates a mild decline to 1.74 per cent.

“Our inflation projection for August 2025 (month-on-month) is underpinned by four key factors.

First, increased food supply from the early harvest, including maize, groundnuts, pumpkins, and vegetables, is expected to ease price pressures in the southern and middle-belt regions. Second, imported food inflation is likely to moderate, supported by naira stability, which closed marginally stronger at N1,531.57/$1 in August, reflecting a mild appreciation of 0.44 per cent. Reduced foreign exchange volatility also helped lower import costs for processed and packaged foods.

“Third, energy costs declined modestly, easing production and transportation expenses, though some of this may be offset by persistent logistics issues. Lastly, robust FX liquidity, supported by stronger reserves, which rose by $1.91bn to close at $41.27bn, steady foreign portfolio inflows, and reduced global headwinds, has strengthened market confidence, enabling the CBN to intervene when necessary and sustain near-term currency stability,” said the analysts.

However, the experts indicated that for September, there were notable risks and their impact on fuel prices.

“Fuel prices may rise amid the disagreement involving Dangote Refinery and the Nigeria Union of Petroleum and Natural Gas Workers over the unionisation of Dangote’s truck drivers, while renewed food price pressures could emerge from flooding that is expected, which could damage farmlands and disrupt logistics. These factors may limit the pace of disinflation or keep inflation anchored around 22 per cent y/y,” the analysts maintained.

Meanwhile, AIICO Capital, in its July Inflation Watch, posited that the Central Bank’s Monetary Policy Committee could be prompted to consider a rate cut when it meets later this month if the downward trend in inflation is sustained.

“We expect that any further decline in the inflation rate in August could prompt the MPC to consider a rate cut when it meets again in September,” AIICO Capital assumed.