Nigerian businesses and households expect inflation-related spending to ease over the next six months, although rising energy costs remain the biggest factor shaping perceptions of inflation, according to the Central Bank of Nigeria’s (CBN) July 2026 Inflation Expectation Survey.
The survey showed that energy costs, insecurity, interest rates and exchange rate movements remained the major factors influencing inflation perceptions among respondents during the review period.
Businesses continued to feel a stronger impact from inflation than households, with 60.9% of firms reporting increased expenditure due to inflation in July, compared with 55.9% of households.
Despite the higher expenditure levels, respondents expect inflation-related costs to gradually decline over the next six months.
Energy costs, including petrol, diesel and electricity, ranked as the biggest driver of inflation perceptions among firms, scoring 74.1 points, while households recorded 61.9 points.
Among firms, insecurity ranked second at 71.3 points, followed by interest rates at 69.0 points and exchange rate movements at 68.8 points.
For households, transportation ranked second at 61.2 points, while insecurity recorded 56.5 points and exchange rate movements stood at 54.1 points.
The CBN said natural disasters, raw materials or household purchases, and infrastructural challenges were generally perceived as less significant contributors to overall inflation during the review period.
Inflation perceptions also varied across household income groups, with middle-income earners recording the highest perception of inflation in July.
Households earning between N150,001 and N250,000 reported the highest inflation perception at 71.0%, while respondents earning between N350,001 and N450,000 recorded the lowest perception of high inflation at 55.6%.
The Inflation Perception Index stood at 40.0 points in July, indicating that respondents perceived current inflation to have moderated compared with the preceding month.
Meanwhile, the Inflation Expectation Index is projected to decline to 21.2 points in August, signalling expectations of further easing in inflationary pressures.
The CBN said businesses were more optimistic than households about a reduction in inflation-related expenditure over the next six months.
“Overall, business and household respondents anticipate a gradual reduction in inflation-related expenditure over the next 6 months,” the CBN said.
The apex bank added that the expectation was largely driven by businesses, which showed a more optimistic outlook regarding an easing of inflationary pressures.
The latest survey comes as Nigeria’s inflation rate has shown signs of moderation. Headline inflation eased marginally to 15.91% in June 2026 from 15.93% in May, according to the National Bureau of Statistics.
The moderation in headline inflation has coincided with improving expectations among businesses and households, although energy costs continue to pose a significant source of pressure.
The development also comes amid proposed measures by the Nigerian Midstream and Downstream Petroleum Regulatory Authority to strengthen competition in the petroleum sector.
The proposed regulations would prohibit petroleum companies from coordinating fuel prices, restricting supply or engaging in market-sharing arrangements that could distort competition across Nigeria’s midstream and downstream oil and gas sector.
Meanwhile, Dangote Refinery reduced its ex-depot petrol price to N1,075 per litre on July 2 following a decline in global crude oil prices.
However, renewed tensions involving the United States and Iran have pushed crude oil prices higher in recent days, potentially creating fresh pressure on energy costs and inflation expectations.
Nigerian households are also increasingly postponing major purchases, including cars, homes and household appliances, as high living costs and elevated borrowing rates continue to squeeze disposable incomes.
The National Bureau of Statistics is expected to release Nigeria’s August 2026 Consumer Price Index report on August 17.
The report will provide the latest official indication of whether the moderation reflected in consumer expectations has translated into further easing in measured inflation.
