Global economic growth, estimated at 3.20 per cent in 2025, was slightly below the 3.30 per cent recorded in 2024. This outcome reflected lingering trade tensions and weaker demand in major economies. Global inflation moderated to 4.20 per cent, driven by lower energy costs and the continued normalisation of supply chains. Financial conditions eased in many economies due to moderating inflation, less-restrictive monetary policies, rising investor confidence, and the de-escalation of trade tensions.

The Nigerian economy remained resilient in 2025, with growth estimated at 3.89 per cent, up from 3.38 per cent in 2024, supported by improvements in both the oil and non-oil sectors. Following the rebasing of the Consumer Price Index by the National Bureau of Statistics, headline inflation averaged 21.26 per cent in 2025, shaped by tight monetary policy, exchange-rate stability, and improved fiscal-monetary coordination.

In the financial sector, growth in monetary aggregates slowed relative to the previous year, reflecting tighter money-market conditions and higher interest rates. In September 2025, the Bank eased its policy stance to support domestic growth and investment. The banking system remained stable, with key financial soundness indicators broadly aligned with regulatory benchmarks, supported by effective supervision and macro-prudential policies.

Fiscal conditions improved in 2025 due to policy and institutional reforms, stable crude oil prices, and improved domestic production. Total public debt stood at 33.98 per cent of GDP at end-June 2025, with domestic debt accounting for 52.86 per cent and external debt 47.14 per cent.

The external sector recorded a favourable performance, with an estimated balance of payments surplus of US$5.80 billion in 2025. External reserves rose to US$45.01 billion, compared with US$40.19 billion in 2024, supported by domestic reforms, higher capital inflows, export receipts, and expanding local refining capacity. Exchange-rate stability was reinforced by these developments.

Looking ahead, 2026 presents a window of opportunity for deeper macroeconomic stabilisation. Real GDP growth is projected at 4.49 per cent, supported by continued structural reforms and a gradually easing monetary policy stance. Increased investment in the oil sector, improved security around production assets, and enhanced domestic refining capacity are expected to reinforce growth. Headline inflation is projected to moderate to an average of 12.94 per cent, reflecting declining food prices and lower premium motor spirit (PMS) costs.

Monetary aggregates in 2026 are expected to be influenced by exchange-rate movements, fiscal operations, election-related spending, and continued prudential measures. The capital market is expected to remain bullish, supported by the ongoing banking sector recapitalisation, rising investor confidence, and supportive policy actions.

The fiscal outlook for 2026 remains optimistic, driven by stronger non-oil revenue mobilisation and the implementation of the Nigeria Tax Act, 2025. Federal Government retained revenue and expenditure are projected at ₦35.51 trillion and ₦47.64 trillion, respectively, resulting in a provisional fiscal deficit of ₦12.14 trillion (3.01 per cent of GDP). Public debt is projected at 34.68 per cent of GDP by end-2026.

The external position is expected to strengthen further in 2026, supported by robust exports, steady remittance inflows, increased oil and gas output, improved domestic refining capacity, and stronger global demand. External reserves are projected to rise to US$51.04 billion, while exchange-rate stability is expected to be sustained.

Despite the positive outlook, risks remain. These include potential inflationary pressures from fiscal slippages, global financial market shocks, capital flow reversals, adverse climatic conditions, oil production disruptions, and renewed geopolitical tensions. Rising non-performing loans and concentration risks associated with banking sector recapitalisation could also pose financial stability challenges.

In response, the Bank will continue to balance price stability with output growth, deepen foreign-exchange market reforms, strengthen financial stability frameworks, and enhance fiscal-monetary coordination to sustain macroeconomic stability and support inclusive growth.

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