NESG calls for monetary, fiscal policy alignment to drop inflation to 24.7% in 2025

The Nigerian Economic Summit Group (NESG) has said that headline inflation could drop to 24.7 per cent in 2025 if there is improvements in fiscal and monetary policy alignment.
The economic advocacy group similarly forecasts the foreign exchange rate to stabilise at an average of N1,300 to the dollar.
It projected this in its 2025 macroeconomic outlook report, themed, ‘Stabilization in Transition: ‘Rethinking Reform Strategies for 2025 and Beyond,’ released this January.
It maintained that the anticipated reduction in inflation and improvement in the exchange rate could be achieved with better coordination between fiscal and monetary policies.
According to NESG, by aligning government spending with targeted monetary interventions, policymakers aim to curb the inflationary pressures that have plagued the Nigerian economy in recent years.
“Inflation is projected to decline to 24.7 per cent, signaling an improvement in the country’s macroeconomic stability. The exchange rate is projected to strengthen, averaging N1300/US$1 in 2025 under the ideal stabilization pathway.
“The effective coordination of fiscal policies with monetary policy measures will drive this anticipated reduction in the inflation rate,” NESG stated.
Nigeria’s inflation has surged to 34.8 per cent as of December 2024, and the exchange rate depreciates hover above N1,500/$1.
The inflationary pressure has continued to plague the Nigerian economy in recent years, especially since President Bola Tinubu’s fuel subsidy removal and foreign exchange rates unification, The ICIR can report.
In its forecast, the NESG highlighted that disciplined government spending, strategic interventions in critical economic sectors, and measures to mitigate the effects of global economic uncertainties on Nigeria’s domestic economy were among the key measures responsible for its projected improvement.
It stated that the expected strengthening of the naira is tied to a combination of favourable economic conditions, which includes higher crude oil sales, the resurgence of oil refining, and expansion in agricultural production.