February 13, 2026/Coronation Report

Summary  

Ahead of the January inflation release, we expect a modest uptick in headline inflation to 19.19% from 15.15% in December, marking a temporary pause in the recent disinflationary trend. The increase should be largely core-driven, reflecting post-festive demand rebound and pass-through from the January Premium Motor Spirit (PMS) price adjustment, particularly on transport and energy-related components.

While, food inflation is likely to remain relatively contained, and recent naira appreciation may help reduce imported price pressures. Nonetheless, the broader disinflation trajectory remains intact, but near-term risks are tilted slightly to the upside.

Key drivers

The projected uptick in headline inflation is largely driven by core CPI dynamics. Core inflation is expected to edge higher, driven by post-festive demand spill-overs and persistent cost pressures across services, transport, and energy components. The upward adjustment in PMS prices to ₦799 from ₦699 per litre has generated both direct energy cost increases and second-round effects through logistics and distribution channels, reinforcing price stickiness.

On the food front, improved market supply from the tail end of the harvest season has moderated price pressures on key staples, while the FAO food price index declined to 123.9 in January 2026 from 124.4 in December, reflecting softer global prices for dairy, meat, and sugar, despite increases in cereals and vegetable oils. Nonetheless, the disinflationary trend from food remains insufficient to offset entrenched core pressures. Exchange rate pass-through has remained relatively contained amid FX stability, with the Naira appreciating by 3.55% to ₦1,386.55/US$ in January 2026 from ₦1,435.76/US$ in December 2025, helping to moderate imported inflation. Overall, while food inflation continues to ease, any moderation may be insufficient to fully offset pressures from core segments, resulting in a marginal uptick in the headline inflation for January print.

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