After an 11-month period of gradual decline in inflation, Nigeria saw this trend come to an end in March 2026 due to new global energy issues, causing overall inflation to rise again, reaching 15.93 percent in May.
This disclosure comes from the recently published Meristem 2026 Midyear Forecast, titled "Stability Meets Uncertainty, Resuming Risks, Maintaining Growth," which was formally launched by Meristem on Wednesday.
The abrupt change is closely linked to "Operation Epic Fury," a 38-day combined U.S.-Israeli armed operation targeting Iran, which began on February 28, 2026. This military effort resulted in the near shutdown of the vital Strait of Hormuz, causing a significant worldwide energy crisis that pushed Brent oil prices over $110 per barrel at their highest point.
"The worldwide oil crisis led to increased local fuel and transport expenses," observed market experts in the report, emphasizing how quickly global energy instability affected Nigeria's domestic economy.
Inflationary pressures persist even as the nation demonstrates robust economic performance in other areas. Nigeria's Gross Domestic Product grew by 3.89 percent compared to the same period last year during the first quarter of 2026, reflecting its highest Q1 expansion rate in ten years.
The growth was mainly fueled by dynamic non-oil industries such as telecom and finance. Additionally, an increasing trade surplus and strong investment flows helped boost Nigeria's foreign exchange reserves beyond the $50 billion mark in June, marking the first occurrence since 2009.
Nevertheless, the local petroleum industry has had difficulty taking full advantage of elevated worldwide price levels. Routine maintenance operations at key sites, including the Bonga field, caused initial half-year crude output to move slowly. Although production eventually increased to 1.70 million barrels daily in May, it continued to stay well under the federal government's financial target of 1.84 mbpd.
Nigeria's recent rise in inflation reflects an overall global pattern, as central banks around the world have had to change their approach. The period of relaxed monetary policy has experienced sudden disruptions, with the European Central Bank and the Bank of Japan unexpectedly increasing interest rates by 25 basis points to address rising prices caused by energy costs.
As central banks adopt a "higher for longer" approach to interest rates to address renewed concerns about inflation, the report highlights that Nigerian officials must navigate the challenging balance between fostering strong local economic growth and managing rising living expenses driven by energy prices during the latter part of the year.
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