Inflation to Average 15.5% in H2 2026, NESG Forecasts

Nigeria’s inflation rate is expected to remain high in the second half of 2026, with the Nigerian Economic Summit Group (NESG) forecasting an average rate of 15.5 percent for H2’26 and the full year.

The NESG said the outlook reflects continuing pressures from insecurity in key agricultural communities, climate-related events, particularly flooding, and elevated transportation costs caused by logistics challenges.

The group, in its 2026 economic outlook, further identified election-related expenditure, festive-season demand and relatively high energy costs as factors that could trigger temporary cost-push inflation in the second half of the year.

“However, these pressures could be partly offset by continued exchange rate stability, the lagged effects of tight monetary policy, and favourable base effects,” it noted.

Economic growth expected to reach 4.2%

The projection was contained in the NESG’s report, “Turning Potential into Progress,” which reviewed Nigeria’s economic performance during the first half of 2026.

The group projected that the economy would grow by 4.2 percent in 2026, supported by stronger performances in the oil, manufacturing, agricultural and services sectors.

It expects economic growth to accelerate during the second half of the year.

“Economic growth is expected to strengthen to 4.5 percent in the second half of 2026, bringing full-year gross domestic product (GDP) growth to approximately 4.2 percent.”

The NESG said improved security conditions and the gradual implementation of upstream reforms should support higher domestic crude oil production and help sustain growth in the oil sector.

It also pointed to increased domestic refining activity as a potential driver of industrial growth, saying it could reduce Nigeria’s reliance on imported refined petroleum products while strengthening the country’s external position.

The manufacturing sector is also expected to perform better, according to the group.

The NESG said lower inflation, continued exchange rate stability and improved foreign exchange liquidity could ease production constraints and improve business confidence.

“Moreover, manufacturing activity is expected to sustain growth momentum as lower inflation, continued exchange rate stability, and improved foreign exchange liquidity ease production constraints and strengthen business confidence,” the NESG said.

The outlook indicates that Nigeria could record stronger economic growth in H2 2026, although inflation, transport costs, insecurity and other supply-side pressures are expected to remain key risks to the economy.

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