S&P Global has raised its forecast for Nigeria’s average inflation rate in 2026 to 16.9%, up from its previous projection of 15.0%, citing stronger-than-expected spillover from higher global oil prices into domestic energy costs.
The revised outlook was published in the ratings agency’s latest report, Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist. S&P noted that Nigeria recorded the largest upward inflation revision among major emerging markets in Europe, the Middle East and Africa (EMEA).
According to the report, rising energy prices have accelerated inflation across several emerging economies, with Nigeria particularly affected by the stronger pass-through of global crude oil prices into domestic fuel and transportation costs. The agency also warned that food inflation could increase further in the coming months due to higher fertilizer and logistics costs.
As a result of the higher inflation outlook, S&P lowered Nigeria’s 2026 GDP growth forecast by 30 basis points to 3.7%, while also trimming its 2027 projection to 3.5%. The agency said persistent inflation is expected to weigh on household consumption, which remains a key driver of Nigeria’s economy.
Despite the downgrade to growth expectations, S&P maintained that Nigeria’s economy remains relatively resilient. It expects improved oil production, a more stable exchange rate, and ongoing economic reforms to provide support, even as consumers continue to grapple with rising living costs.
