FBNQuest Merchant Bank has forecast Nigeria’s GDP to grow by 3.4% by the end of 2025, aligning with the International Monetary Fund’s (IMF) revised outlook.
In its mid-year economic review titled “Steering the Course from Volatility to Stability,” the investment firm noted that sustained growth in the services sector—particularly ICT and financial services—would be a key driver of expansion.
“We forecast a steady continuation of Nigeria’s economic recovery, with real GDP growth forecast at 3.4% in 2025,” the report stated.
Nigeria’s GDP rose by 3.13% in Q1 2025, mainly buoyed by a strong services sector, which contributed 57.5% to the total GDP. This marked an improvement from the 2.27% growth in Q1 2024.
Thanks to the recent GDP rebasing exercise by the National Bureau of Statistics (NBS), Nigeria’s economy now stands at $251 billion, reflecting a more comprehensive inclusion of previously untracked sectors.
Despite the growth, FBNQuest predicts the naira will depreciate to ₦1,662 per dollar by year-end due to uneven foreign portfolio inflows and heightened external risks.
“The recovery in FPI flows has been uneven, and rising external risks could weigh on sentiment,” the bank said. “We forecast the naira to end the year at NGN/USD 1,662.”
So far, the naira has traded within a relatively narrow range, averaging ₦1,544.25/$, with its strongest showing at ₦1,477.72/$.
Inflation Outlook: Temporary Rise to 32.3%
Headline inflation is projected to temporarily peak at 32.3% in December 2025, influenced by the low base effect from the same period in 2024.
“This spike is technical and not indicative of a renewed inflation surge,” the report explained.
Inflation has been easing for three straight months, dropping to 22.2% in June 2025, the lowest level in nearly two years. Analysts attribute this to moderating fuel and food prices.
While monetary tightening is expected to persist through 2025, the bank hinted that modest rate cuts (25–50 basis points) could be possible if inflation trends lower later in the year.
