Nigeria has secured a record it did not want. Of all the major emerging market economies tracked by S&P Global in Europe, the Middle East, and Africa, none has received a larger upward revision to its 2026 inflation forecast than Nigeria.
S&P Global has raised its forecast for Nigeria's average inflation rate in 2026 to 16.9%, from its earlier projection of 15.0%, citing stronger-than-expected pass-through from oil prices to domestic energy costs. The ratings agency disclosed this in its latest assessment, titled "Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist." Among key EM EMEA economies, S&P said it raised its inflation forecast for Nigeria the most, to 16.9% in 2026 from 15.0%.
S&P Global said energy inflation has accelerated across emerging markets in the EMEA region, with Nigeria and Turkiye among the worst affected. The agency also warned that food inflation could rise in the coming months because of higher transportation and fertiliser costs. "Energy inflation has picked up broadly across the region, particularly in Nigeria and Turkiye," the report stated.
The growth cost of elevated inflation is equally high. S&P Global reduced Nigeria's 2026 GDP growth forecast by 30 basis points to 3.7% and also cut its 2027 growth projection by 30 basis points to 3.5%, linking the lower growth outlook to higher inflation and its impact on household consumption, which remains a major driver of economic activity in Nigeria.
The timing of the revision lands against the backdrop of a confirmed inflation rebound. Nigeria's annual inflation rate rose for a third straight month to 15.93% in May 2026, the highest since last November, with food inflation accelerating to 17.8% from 16.6% in April, alongside transport costs rising 17.1%, partly driven by the continued pass-through of the March fuel price shock linked to the Middle East conflict.
S&P's update comes amid renewed global commodity price pressures caused by geopolitical tensions in the Middle East and disruptions to energy supply chains. The agency noted that price pressures in Nigeria may remain elevated despite expectations of exchange-rate stability and higher oil output.
The ceasefire dividend that has since pushed Brent crude toward $78 per barrel and cut Dangote Refinery's ex-gantry petrol price by ₦75 per litre may eventually provide some disinflationary relief in the second half of 2026. But S&P's 16.9% full-year average forecast accounts for the months of elevated prices already locked into the data, making the arithmetic of any significant annual undershoot increasingly difficult.
For the CBN's Monetary Policy Committee, the S&P revision complicates the path toward resuming interest rate cuts. With inflation running above forecast, three consecutive monthly increases already on the record, and a globally recognised ratings agency projecting a further climb toward 16.9%, the case for holding rates at its July meeting has just become considerably stronger.
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