June 16, 2026/InvestmentOne Report

The National Bureau of Statistics (NBS) reported that headline inflation edged up to 15.93% YoY in May 2026, 24bps higher than the 15.69% YoY recorded in the previous month, driven by a combination of normalising base effects, sustained food supply-side pressures, a sharp re-acceleration in core services costs, and residual Naira pass-through into imported goods. There is, however, a continued deceleration in the pace of monthly price increases, with month-on-month headline inflation declining to 1.75% in May from 2.13% in April. 

Looking ahead, we expect inflationary pressures to be sustained, albeit moderately eased in June 2026. The US and Iran have reportedly come to a deal which should open the Strait of Hormuz on the 19th of June. This is expected to ease global energy supply risks, and ultimately lower PMS & AGO costs to ease in energy-driven inflation pressures. Food prices, while moderating month-on-month in May, aided by early harvest season dynamics have remained structurally challenged. Persistent insecurity across farming corridors in Plateau, Benue, Adamawa, and Taraba, compounded by deteriorating road infrastructure, continues to constrain agricultural supply responses.

On the monetary policy front, the persistence of headline inflation above 15% is likely to sustain the central bank’s cautious posture, with rate cuts remaining unlikely in the immediate term. We also consider that the festive spendings of Easter & Eid in April and May respectively, should ease in June. On the balance of factors, we expect to see a marginal month-on-month deceleration in June 2026, as lower energy prices crystalize.

Kindly find HERE, the full report, covering our analysis and considerations.