S&P Global has raised its forecast for Nigeria’s average inflation rate in 2026 to 16.9 per cent from an earlier projection of 15 per cent, citing stronger-than-expected transmission of higher oil prices into domestic energy costs.

The ratings agency disclosed this in its latest assessment, ‘Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist,’ where it also lowered Nigeria’s gross domestic product (GDP) growth forecasts for 2026 and 2027 by 30 basis points each to 3.7 per cent and 3.5 per cent, respectively.

According to the agency, inflationary pressures have intensified across emerging markets in Europe, the Middle East and Africa (EMEA), with Nigeria recording the largest upward revision to inflation among key economies covered in the report.

S&P Global said energy inflation has accelerated across the region, particularly in Nigeria and Turkiye, while food inflation is expected to rise further in the coming months due to increased transportation and fertiliser costs.

“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.

It added: “Energy inflation has picked up broadly across the region, particularly in Nigeria and Turkiye.”

The agency also warned that food prices could come under additional pressure in the months ahead.
“We expect food inflation to increase over the coming months due to higher transportation and fertiliser costs,” it stated.

Explaining the revision to Nigeria’s inflation outlook, S&P Global said: “Among key EM EMEA economies, we raised our inflation forecast for Nigeria the most, to 16.9 per cent in 2026 from 15 per cent.”

It noted that the revised forecast reflects a stronger-than-expected pass-through of higher oil prices into domestic energy inflation.

The agency said the worsening inflation outlook has weighed on its expectations for economic growth, largely because household consumption remains a key driver of economic activity in Nigeria.

As a result, it reduced Nigeria’s 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.

According to S&P Global, higher consumer prices could weaken household spending and dampen overall economic growth despite the economy’s expected resilience.

It maintained that Nigeria’s economy would remain resilient but cautioned that persistent inflationary pressures, particularly from energy and food costs, could continue to affect consumer purchasing power and growth prospects.