Global Economy

Global growth remained moderate but uneven in H1 2026. World GDP is projected to expand roughly 3.0% this year, with notable divergence among regions. According to the IMF, some countries were bogged down by geopolitical shocks (notably the Middle East conflict) while some benefited from robust tech demand. Inflation pressures eased in many countries, though the IMF notes that global disinflation has stalled as rising energy prices offset the decline in core inflation. Central banks are on different paths. In the U.S., the Fed kept its policy rate unchanged (kept funds rates at 3.50–3.75%) as growth and inflation moderated. China also followed the trend as policymakers balanced weak domestic demand against resilient exports. In contrast, the European Central Bank raised interest rates by 25 basis points in June in response to inflationary pressures stemming from the conflict in the Middle East.

Domestic Economy

Nigeria’s economy strengthened further in Q1 2026, with real GDP growing by 3.89% year-on-year, according to the National Bureau of Statistics (NBS). Although this performance exceeded the 3.13% growth recorded in Q1 2025, it remained slightly below the 4.07% achieved in Q4 2025. The oil refining subsector stood out as the best performer, which recorded a significant 37.46% year-on-year growth. This huge growth is due to the spike in oil prices because of the US/Iran conflict that broke out in late February.

Fiscal Policy

The Federal Government’s fiscal stance remains expansionary in 2026, reflecting its commitment to infrastructure development, social investment, and economic reforms despite mounting financing pressures.

Monetary Policy

The Monetary Policy Committee has held two meetings so far in 2026. One in February and the other in May. At the beginning of the year, due to the disinflationary trend. The MPC decided to cut rate in February from 27% to 26.50%. However, in May the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), at its 305th meeting, retained the Monetary Policy Rate (MPR) and other key policy parameters, maintaining a cautious stance as it continues to balance inflation concerns with the need to preserve price stability.

Financial Markets

The Nigerian equities market began 2026 on a strong footing, carrying forward the positive momentum from the close of the previous year. Investor confidence remained elevated as market participants positioned for another earnings season, with expectations of a positive 2025 corporate performance and attractive dividend payouts. This optimism, alongside improving sentiment towards domestic equities, set the stage for a remarkable first half, as the market embarked on a historic rally that saw the All-Share Index (ASI) break several milestones within the period.

The domestic fixed income market in the first half of 2026 was largely shaped by changing expectations around monetary policy. Following the decline in inflation towards the end of 2025, investors entered the year anticipating that the CBN would begin a more accommodative policy cycle. This optimism was reinforced by the Monetary Policy Committee’s (MPC) 50 basis point reduction in the Monetary Policy Rate (MPR) at its February meeting and putting downward pressure on yields. However, the resurgence in inflation from March and the MPC’s decision to keep rates unchanged in May tempered expectations of further policy easing, leading investors to reassess the outlook for fixed income yields.

A key milestone was the re-integration of licensed Bureau De Change (BDC) operators into the official foreign exchange market, alongside stricter operational guidelines designed to curb speculative activities and improve market discipline. Under the revised framework, BDCs were permitted to purchase up to US$150,000 weekly from Authorised Dealer Banks, while being required to resell any unused foreign exchange within 24 hours.

 Please follow the link ‘’ 2026 Midyear Review – Amid Rising Global Tensions: Inflation Surges, Markets Endure’’ to view the full report.