IMF Predicts 14% Inflation Rate for Nigeria by 2029

By Abass Ganiyu
ABUJA — Nigeria's inflation rate is forecasted to stabilize at 14% by 2029, signaling a potential end to the current upward trend, according to the latest data from the International Monetary Fund (IMF). This projection comes as a relief, given the current inflation rate of 33.69% as of April 2024, as reported by the National Bureau of Statistics.

The IMF's forecast suggests a gradual decline in the inflation rate: from 23% in 2025, to 16% in 2026, and then to 15.4% in 2027, eventually stabilizing at 14% in both 2028 and 2029. This anticipated stabilization is viewed as a positive development for Nigeria's economy, which has been grappling with significant inflation and rising interest rates.

In response to these economic challenges, the Central Bank of Nigeria has implemented various measures, including increasing interest rates at the 295th Monetary Policy Committee meeting in May 2024. Despite these efforts, economists urge the government to address the underlying drivers of inflation, primarily food and transportation costs.

Paul Alaje, Chief Economist at SPM Professionals, criticized the increase in the Monetary Policy Rate (MPR), arguing that it has exacerbated economic hardships. He emphasized the need for alternative economic tools beyond monetary policy to address the root causes of inflation.

Conversely, economist Jonathan Thomas viewed the IMF's prediction as a positive sign, stressing the importance of sustained efforts by the government and monetary authorities to tackle the fundamental causes of inflation. He highlighted that maintaining a stable economic environment is crucial for promoting sustainable economic growth and achieving the IMF's projected inflation rate.

Addressing the drivers of inflation and implementing effective policies are essential steps for Nigeria to foster economic stability and growth, ultimately meeting the IMF's optimistic forecast for 2029.

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