NBS, Analysts Urge Calm Over Likely Rise in December Inflation Figures

Nigeria’s December 2025 inflation figure, scheduled for release by the National Bureau of Statistics (NBS) this Thursday, is expected to record a noticeable uptick, a development analysts say should not be mistaken for a fresh surge in prices or a breakdown in macroeconomic stability.

Financial analysts and economic researchers familiar with the data caution that the anticipated rise is largely the result of a statistical base-year effect following the recent rebasing of the Consumer Price Index (CPI), rather than renewed inflationary pressure in the economy.

The expected movement in the headline year-on-year inflation rate stems from the CPI rebasing carried out by the NBS in January 2025, when 2024 was adopted as the new reference year for measuring price changes. As part of the internationally accepted rebasing process, December 2024 was fixed as the index reference period (December 2024 = 100) to ensure continuity in the inflation series.

Economists explain that this technical adjustment creates what is known as a “base-effect spike” in December 2025, making inflation appear higher when compared year-on-year, even if actual price increases during the month were relatively modest.

“This is not a price shock, not a policy failure, and not an indication that inflation has suddenly accelerated,” one analyst said. “It is a mathematical outcome of changing the measuring tape.”

The NBS is expected to emphasise that the December figure does not signal inflation spiralling out of control. Recent CPI data show that while prices remain elevated, the pace of price increases has been moderating, pointing to a gradual deceleration rather than an acceleration in inflation momentum.

For many Nigerians, however, inflation statistics often feel disconnected from daily realities. In markets across Lagos, Kano and Port Harcourt, a common refrain persists: “Everything has doubled.” This perceived gap between lived experience and official inflation figures has historically fuelled mistrust of economic data.

The disconnect was one of the key reasons the NBS overhauled its inflation framework. For more than a decade, Nigeria relied on a CPI basket designed in 2009—long before smartphones, fintech services, solar power solutions, rising transport costs and changing food habits became central to household spending.

In the 2025 rebasing, the CPI basket expanded from 740 items to 934, with 404 new products added and obsolete ones removed. A new category—Financial Services and Insurance—was introduced, reflecting the growing role of banking, insurance and digital financial services in everyday life.

Spending weights were also adjusted. While food remains the largest expense for households, its share dropped from over 50 percent to about 40 percent. Meanwhile, categories such as transport and restaurants and accommodation rose sharply, the latter jumping from about one percent to nearly 13 percent, highlighting changing consumption patterns and the rising cost of living.

The base-effect challenge becomes most visible in December 2025 because inflation is being compared to a single reference point, December 2024. Analysts say this can create an “artificial spike” that exaggerates the year-on-year figure, even when month-on-month price movements are stable.

Experts have therefore advised that inflation data should be interpreted holistically, with greater attention paid to month-on-month inflation, core inflation trends, and post-December price behaviour, rather than a single headline number.

There are also calls for the NBS to consider publishing an inflation measure adjusted for base effects to guide policymakers, investors and the public more effectively.

The Bureau is understood to be particularly concerned about the risk of misinterpretation, warning that misunderstanding inflation data could trigger unnecessary panic, speculative price increases and distorted public expectations.

Beyond public perception, inflation figures carry significant policy consequences. They influence minimum wage negotiations, tax planning and monetary policy decisions by the Central Bank of Nigeria (CBN). Analysts warn that reacting to an artificially high inflation number could prompt overly tight monetary policies, raising borrowing costs for businesses and households unnecessarily.

Looking ahead, economists say clearer insight into Nigeria’s inflation trajectory will likely emerge from data in early 2026, as seasonal pressures ease and the rebased CPI framework stabilises.

The full CPI and inflation report for December 2025, alongside an explanatory press release, is expected to be published by the NBS in due course.