Fitch Raises Nigeria's Inflation Forecast to 15.5% by 2026

Fitch Solutions has updated Nigeria's inflation forecast to 15.5% for 2026, up from the previous estimate of 12.3%, due to rising inflationary pressures linked to the ongoing Middle East crisis. The report highlights that Nigeria's economic structure, heavily reliant on crude oil, is vulnerable to external shocks, particularly in energy trade.

Despite the inflation increase, Fitch has slightly upgraded Nigeria's GDP growth forecast to 4.4% from 4.3%, attributing this to anticipated higher global oil prices that are expected to boost export earnings and strengthen fiscal revenue. The report notes that Nigeria's reduced dependence on fuel imports, following the ramp-up of Dangote Refinery, will help mitigate the impact of rising oil prices on the economy.

However, the inflationary pressures could erode household disposable income and dampen consumption. The report emphasizes that while higher oil prices may provide fiscal windfalls, they do not necessarily translate into improved welfare for the population.