Nigeria’s inflation rate for December 2025 may appear unusually high, but the increase is expected to be largely statistical rather than a sudden surge in prices, according to the National Bureau of Statistics (NBS).
The statistics agency has warned that the projected jump will be caused by a technical adjustment linked to the rebasing of the Consumer Price Index (CPI), not a fresh economic shock.
What the CPI measures
The Consumer Price Index is the main tool used to track inflation.
It measures changes in the prices of goods and services commonly consumed by households across the country. Instead of focusing on the cost of a single item, the CPI reflects how the total cost of a “basket” of everyday items changes over time.
Each month, price data is collected from markets and retail outlets across Nigeria’s 36 states and the Federal Capital Territory. The results are compared with a reference point known as the base year.
What changed after the 2025 rebasing
In 2025, the NBS updated the CPI to better reflect current consumption habits. The number of items tracked increased from 740 to 934, with outdated products removed and new ones added.
A notable inclusion is a new category covering financial services and insurance, reflecting the growth of banking, fintech, and insurance usage in Nigeria. Spending weights were also adjusted to align with how Nigerians now spend their income.
Under the revised structure, food accounts for about 40 percent of household spending, down from more than half previously. Meanwhile, transport and hospitality-related expenses now carry significantly more weight in the inflation calculation.
Why December 2025 may show an “artificial spike”
When the CPI was rebased, December 2024 was chosen as the base month and assigned an index value of 100. Comparing December 2025 directly to this single reference point creates what analysts describe as a base effect.
Because prices have been rising steadily over the year, the year-on-year comparison may exaggerate the increase, making inflation appear to jump sharply even if price growth has been gradual.
Experts say this distortion is purely mathematical and does not mean that prices suddenly spiralled out of control in December.
Is inflation actually easing?
While prices remain high, the NBS says the pace of increase has started to slow.
A decline in the inflation rate from October to November 2025 suggests that prices are still rising, but at a slower rate than before.
This does not imply that goods have become cheaper, but rather that the speed of price increases has moderated.
Why this matters
Inflation figures influence key economic decisions, including minimum wage negotiations, interest rate policies by the Central Bank of Nigeria, and borrowing costs for individuals and businesses.
To improve accuracy and transparency, the NBS says it is adopting digital data collection methods that allow real-time price monitoring.
According to the bureau, as the new CPI framework stabilises and reference periods are normalised, inflation figures are expected to better reflect real economic conditions faced by households and businesses.
