Access Bank Forecasts Inflation to Ease 0.31% to 15.86% in July

Access Bank’s Economic Intelligence Unit has projected that Nigeria’s headline inflation rate will ease marginally to 15.86 per cent year-on-year in July 2026, down from the 15.91 per cent recorded in June—a decline of 0.31 per cent.

The forecast, contained in the bank’s “Forecast for July 2026 Inflation” report, attributes the expected moderation to sustained exchange rate stability, improving food supply due to the commencement of the harvest season, stronger external reserves, and the continued impact of restrictive monetary policy.

Headline inflation in June eased slightly to 15.91 per cent from 15.93 per cent in May, ending three consecutive months of increases. Access Bank noted that this moderation was supported by exchange rate stability, with the average official rate appreciating to ₦1,367.78 per dollar from ₦1,371.17, while external reserves rose to $51.92 billion.

However, underlying price pressures remain elevated, particularly in the food sector. Food inflation increased to 17.52 per cent year-on-year in June from 16.96 per cent in May, while month-on-month food inflation accelerated to 3.75 per cent from 2.98 per cent. Access Bank identified the lean farming season, insecurity in key agricultural regions, flooding, higher transportation costs, and increased logistics expenses as factors driving food prices higher.

The report noted that persistent food supply constraints continue to weaken household purchasing power and remain the biggest obstacle to faster disinflation.

In contrast, core inflation—which excludes volatile agricultural produce and energy-related components—continued to ease, declining to 15.92 per cent year-on-year in June from 16.82 per cent in May, while month-on-month core inflation fell to 1.66 per cent from 1.94 per cent.

Access Bank said the divergence between food and core inflation indicates that current inflationary pressures are increasingly supply-driven, limiting the effectiveness of monetary policy alone.

The bank also warned that renewed geopolitical tensions in the Middle East could add inflationary pressures through higher global commodity prices, freight costs, and supply chain disruptions. Brent crude briefly rose above $100 per barrel before retreating toward $80, adding volatility to energy markets.

On monetary policy, Access Bank noted that the Central Bank of Nigeria maintained its Monetary Policy Rate at 26.50 per cent at its 306th Monetary Policy Committee meeting in July, considering the current stance sufficiently restrictive to consolidate macroeconomic stability and preserve exchange rate gains.

Access Bank also forecast that the Consumer Price Index (CPI) will rise to 145.81 in July from 143.02 in June, based on a Vector Autoregressive model using lagged values of the composite CPI and survey-based inflation expectations.

The bank expects the ongoing harvest season to improve food supply and support further moderation in inflation, while exchange rate stability, stronger reserves, and tight monetary conditions should continue to ease core inflation.

Recent policy measures, including the restoration of the naira-for-crude arrangement, could improve foreign exchange liquidity and moderate imported inflation over time. The arrangement has enabled the Dangote Refinery to resume selling Premium Motor Spirit in naira, reducing FX demand from petroleum marketers.

Overall, Access Bank described Nigeria’s near-term inflation outlook as balanced, with improving domestic fundamentals offset by rising external risks. Food supply constraints and global commodity price volatility remain the key upside risks to inflation in the months ahead.