…Base effects play a central role in explaining the divergence between the easing year-on-year rate and the firmer month-on-month outcome.
TUE DEC 16 2025-theGBJournal| While year-on-year inflation continued to decelerate, month-on-month inflation recorded an uptick, underscoring the difference between trend disinflation and short-term price dynamics.
On a m-o-m basis, inflation was 1.22% compared to 0.93% recorded in October, with food inflation being the major resurgence as it increased to 1.13% from -0.37% in October, and core inflation declined by 0.14% to 1.28% from 1.42%.
This uptick reflects renewed momentum in current prices rather than a reversal of the broader trend, and it highlights why month-on-month inflation remains the more reliable gauge of present inflationary conditions, given the rebasing.
The increase in the month-on-month print reflects renewed price pressures within the month, driven by seasonal demand effects, early festive-related consumption.
Base effects play a central role in explaining the divergence between the easing year-on-year rate and the firmer month-on-month outcome.
Inflation in late 2024 was elevated, creating a high comparison base for 2025 readings. As these high base months drop out of the annual calculation, year-on-year inflation declines mechanically, even when current monthly price increases remain positive or accelerate.
The month-on-month uptick, therefore, signals that underlying inflation dynamics remain unresolved. Core inflation captures more persistent pressures limiting the economy’s ability to absorb short-term food or demand shocks.
As a result, any seasonal spike in food prices feeds through more quickly to headline inflation than would be the case in a lower-core environment.
Looking Ahead: Year-end Jump
Nigeria’s inflation is set to peak in December 2025, diverging sharply from the year’s trend and establishing itself as a structural outlier. This spike is not merely seasonal; it reflects the interaction of rebased CPI weights, base effects, and supply-demand dynamics.
The 2025 rebasing of the Consumer Price Index (CPI) recalibrates the basket of goods and services to reflect current consumption patterns, adjusting weights for items such as food,transport, and utilities.
With these items accounting for larger shares of household expenditure post-rebase, price movements in December, traditionally a month of elevated demand due to festive spending, carry greater influence on headline inflation.
Seasonal and supply-side pressures further reinforce the trend. Food prices rise in response to logistics bottlenecks and higher festive demand, while energy and transport costs reflect currency volatility and elevated import bills. These elements, coupled with the rebased CPI weights, ensure that December stands out as the peak month of inflation for 2025.
Looking into 2026, the spike in inflation is expected to correct. As month-on-month growth returns to trend and the base effect unwinds, headline inflation should ease to levels more reflective of underlying price pressures.
Bottom Line
Nigeria’s headline inflation eased to 14.45% year-on-year in November, extending the disinflation trend for the eighth consecutive month, primarily driven by a sharp slowdown in food inflation to 11.08% y/y.
Core inflation, however, remains elevated at 18.04% y/y, highlighting that underlying price pressures are still sticky and that the recent decline in headline inflation is not yet broad-based.
The month-on-month dynamics tell a different story. Headline inflation accelerated to 1.22% m/m, while food prices rose 1.50% m/m, reflecting seasonal demand, a declining harvest tailwind, and tighter supply conditions.
These trends indicate that near-term upside risks are building ahead of December, driven by festive spending, potential food-price pressures, rebased effect, and if the naira weakens. The analysis is written and provided by Comercio Partners Research
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