Media365
Inflation expectations across the euro zone have remained broadly stable over the past three months, while economic growth prospects have weakened, according to the European Central Bank’s (ECB) latest Survey of Professional Forecasters released on Friday.
The survey showed inflation is expected to average 2.7 per cent in 2026, unchanged from the previous round of projections. Economists, however, marginally raised their forecast for 2027 inflation to 2.2 per cent from 2.1 per cent. Inflation is then expected to return to the ECB’s 2 per cent target in 2028 and remain at that level thereafter.
The findings come a day after the ECB kept interest rates unchanged, signalling that while elevated energy prices continue to keep inflation above target, there is still limited evidence of broader second-round price pressures that could entrench high inflation.
The survey is closely watched by policymakers and serves as an important input in the ECB’s monetary policy deliberations. While the inflation outlook remained largely intact, forecasters turned more cautious on economic growth.
The euro zone economy is now expected to expand by 0.6 per cent in 2026, significantly lower than the 1.0 per cent forecast three months ago. The growth projection for 2027 was also revised down to 1.2 per cent from 1.3 per cent, reflecting continued weakness in economic activity.
The ECB has indicated that any future interest rate decisions will remain data-dependent, with markets closely watching inflation trends, wage growth, and the impact of energy prices ahead of its next policy meeting.
