Financial Markets Dealers Association (FMDA) has projected a further moderation in Nigeria’s inflation rate in May 2026, attributing the outlook largely to stable domestic food prices and easing price pressures across key commodities.
In its latest Nigeria Inflation Forecast for May 2026, the association said inflationary pressures are expected to continue their downward trend, supported by favourable base effects and relatively stable market conditions.
The report noted that on a month-on-month basis, inflation is expected to slow significantly, with headline inflation projected to rise by about 0.95 per cent in May, compared to 2.13 per cent recorded in April.
On a year-on-year basis, FMDA projected that headline inflation would decline further to around 15.02 per cent, driven by sustained moderation in monthly price movements.
According to the association, the anticipated easing is largely anchored on stability in food prices across major staples.
It stated that “domestic food prices were largely stable in May, according to the World Bank food market survey. The food price index remained unchanged at 3.92, reflecting mixed price movements across key staples.”
The report explained that while prices of items such as fish, beef, yam and eggs recorded increases, declines in beans, onions and rice helped offset broader food inflation pressures.
FMDA said this balance in food price movements is expected to play a key role in containing overall inflation in the month under review.
However, the association warned that some macroeconomic factors continue to pose risks to the inflation outlook.
It noted that exchange rate movements turned mildly inflationary during the period, with the naira depreciating by 0.64 per cent to an average of N1,370 to the dollar in May, compared with N1,361.22 in April.
According to the report, “the depreciation may increase imported cost pressures, particularly for food and manufacturing inputs.”
Energy costs also remained elevated, with petrol prices largely within the N1,400 to N1,500 per litre range during the period, sustaining pressure on transportation and production costs.
FMDA stated that “overall, stable food prices may help contain inflationary pressures in May. However, exchange rate depreciation and elevated fuel costs are expected to keep underlying inflation pressures firm.”
On the global front, the association observed that inflation remained elevated across major economies, while international food prices continued to face upward pressure due to rising energy and fertiliser costs, as well as geopolitical uncertainties affecting supply chains.
It also highlighted increases in global prices of wheat, maize and rice, warning that these developments could sustain imported inflationary pressures in Nigeria in the months ahead.
Despite these risks, FMDA maintained that stable domestic food prices, combined with favourable statistical base effects, would support a continued easing of inflation in May 2026.
