Title: Artificial Intelligence and Inflation Forecasting: Implications for Central Bank of Nigeria Policy Decisions.
Authors: .Hamza Ibrahim
. Samuel Vintenaba
. Onuh Sunday Michael
Volume: 10
Issue: 7
Pages: 47-53
Publication Date: 2026/07/28
Abstract:
Inflation is not new to Nigeria as a sovereign country over years as it continues to affect the economy negatively as many scholars offer their views on the matter. For Nigeria, adopting artificial intelligence-driven inflation forecasting will improve its inflation forecasting. Conventional forecasting techniques frequently experience reduced predictive performance because of structural economic changes, volatile exchange rate, fiscal shocks, insecurity, and supply-side disruptions. The primary objective of the study is to examine the role of Artificial Intelligence in improving inflation forecasting and its implications for monetary policy decisions of the Central Bank of Nigeria. The research work adopted the Data-Driven Decision-Making Theory as its theoretical framework. Qualitative and Descriptive research design was used for the research where only secondary sources of data were utilised. The research found out that Central Bank of Nigeria currently combines both conventional economic models and data-driven forecasting techniques. Also, Artificial Intelligence-generated inflation forecast have important implications for monetary policy. Challenges limiting adoption of Artificial Intelligence in inflation forecasting by the Central Bank of Nigeria include poor availability of high quality real-time economic data, inadequate digital infrastructures and limited Artificial Intelligence expertise. The study recommended complete shifting from traditional inflation forecasting to Artificial Intelligence models for inflation forecasting and need to ensure availability of high quality real-time economic data, adequate digital infrastructures, as well as training and retraining of its staff on Artificial Intelligence operational models by the Central Bank of Nigeria.