S&P Global has raised its forecast for Nigeria’s average inflation rate in 2026 to 16.9 per cent from its earlier projection of 15.0 per cent, citing stronger-than-expected pass-through of higher oil prices to domestic energy costs.
The ratings agency disclosed the revised outlook in its latest report titled Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist.
At the same time, S&P Global lowered Nigeria’s gross domestic product growth forecasts for 2026 and 2027 by 30 basis points each to 3.7 per cent and 3.5 per cent, respectively, while maintaining that the country’s economy would remain resilient.
According to the report, inflationary pressures have intensified across emerging markets in Europe, the Middle East and Africa, with Nigeria and Turkiye recording some of the strongest increases in energy inflation.
“Compared with our March baseline, we have raised our inflation projections and lowered our growth forecasts for most EM economies in Europe, the Middle East, and Africa,” the agency said.
S&P Global added that higher transportation and fertiliser costs are expected to push food inflation higher in the coming months.
“Energy inflation has picked up broadly across the region, particularly in Nigeria and Turkiye,” the report stated.
The agency noted that Nigeria recorded the largest upward revision to inflation among the major emerging-market economies in the Europe, Middle East and Africa region.
“Among key EM EMEA economies, we raised our inflation forecast for Nigeria the most, to 16.9% in 2026 from 15.0%,” S&P Global said.
According to the agency, the revised inflation outlook reflects the stronger-than-expected transmission of higher global oil prices into domestic energy costs.
S&P Global also linked its lower economic growth projections to the expected impact of rising inflation on household consumption, which remains a major driver of Nigeria’s economy.
The agency reduced its 2026 GDP growth forecast by 30 basis points to 3.7 per cent and lowered its 2027 projection by the same margin to 3.5 per cent.
It warned that higher consumer prices could weaken household spending, slowing economic expansion despite expectations of exchange rate stability and stronger oil production.
The revised outlook comes amid renewed pressure on global commodity prices caused by geopolitical tensions in the Middle East and disruptions to international energy supply chains.
Nigeria’s headline inflation rate rose to 15.93 per cent in May 2026 from 15.69 per cent recorded in April.
The report also noted that the World Bank Energy Index climbed to 146.4 points from 130.6 points, while the Food and Agriculture Organization’s Food Price Index increased by 1.6 per cent to 130.7 points, marking its third consecutive monthly rise.
S&P Global said the latest projections suggest that inflationary pressures are likely to remain elevated in Nigeria even as policymakers continue efforts to stabilise the economy.
