While multiple empirical studies across emerging markets and developing regions support the conclusion that fiscal deficits contribute to inflationary pressures, findings can vary depending on the specific economic context and methodology applied.
The claim that budget deficits cause inflation is supported by multiple recent multi-country and single-country panel studies (e.g., BRICS economies, Sub-Saharan Africa, and long-run estimates in Nigeria) showing positive relationships and causal links. Conversely, at least one study on Nigeria found no causal relationship, demonstrating some context-dependent variation, but the weight of the provided empirical literature leans toward support.