Global ratings agency S&P Global has revised its inflation projection for Nigeria upward to 16.9% for 2026, citing stronger-than-expected transmission of rising global oil prices into domestic energy costs.
The new forecast, released in the agency’s Economic Outlook Emerging Markets Q3 2026 report, is higher than its previous estimate of 15.0%. The adjustment reflects intensified inflationary pressures across emerging markets in Europe, the Middle East, and Africa (EMEA), with Nigeria and Türkiye among the most affected.
S&P Global also warned that food inflation could accelerate further in the coming months due to higher transportation and fertiliser costs linked to global commodity trends.
Growth Outlook Revised Downward
In response to the elevated inflation risks, the agency lowered Nigeria’s GDP growth forecasts for 2026 and 2027 by 30 basis points each, to 3.7% and 3.5% respectively. It noted that higher consumer prices are likely to weigh on household consumption, a key driver of economic activity in Nigeria.
“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 report stated.
Persistent Price Pressures
The revised outlook comes as Nigeria continues to grapple with elevated consumer prices. Headline inflation rose to 15.93% in May 2026, up from 15.69% in April, according to the National Bureau of Statistics.
S&P Global’s projection highlights the impact of global energy market volatility, with the World Bank Energy Index rising sharply and the FAO Food Price Index recording its third consecutive monthly increase.
While the Central Bank of Nigeria has maintained a tight monetary policy to anchor inflation, analysts say sustained price pressures may require complementary fiscal measures and improved supply chain efficiency to ease the burden on households and businesses.
The agency’s updated forecasts underscore the challenges Nigeria faces in balancing price stability with economic growth amid a complex global environment shaped by geopolitical tensions and commodity price swings.
