CBN Governor’s Optimistic Forecast: Nigeria’s Inflation to Ease by 2025
The Central Bank of Nigeria (CBN) projects that the country’s Gross Domestic Product (GDP) will grow by 4.17% in 2025, an increase from the 3.36% recorded in 2024. This optimistic outlook is attributed to ongoing fiscal and monetary reforms, stable crude oil prices, and improvements in domestic oil production.
CBN Governor Olayemi Cardoso highlighted that reforms initiated by President Bola Tinubu in 2023, such as the removal of the petrol subsidy and the devaluation of the naira, initially led to a surge in inflation, which currently stands at 34.8%. However, the central bank anticipates that as these reforms take effect, inflation will begin to decline.
Additionally, the CBN expects foreign exchange reserves to rise due to increased oil production, projected to reach 2.3 million barrels per day by mid-year. In 2024, Nigeria’s foreign exchange inflows exceeded $6 billion, boosting reserves to over $40 billion. The central bank remains committed to price stability and aims to improve transparency and efficiency in the foreign exchange market to foster sector development.
Finance Minister Wale Edun emphasized the need to double economic growth from an annualized rate of 3.5% to help lift Nigeria’s population out of poverty. He noted that recent economic reforms have set the country on a path to growth and stressed the importance of increased investment. The government aims to replace reliance on borrowing with private investment to address sluggish growth, high inflation, and debt.
While these projections are promising, achieving the targeted inflation rate of 15% in 2025 will require effective collaboration between monetary and fiscal authorities, alongside private sector participation, to ensure a stable economic environment.
For more insights into the CBN’s economic projections, you can watch the following video: