ECB economists raise the inflation forecast for the euro area in 2026

Economists consulted by the European Central Bank estimate an inflation rate of 2.7% in the euro area in 2026, an increase compared to the previous survey, and an economic growth of 1.0%, revised downwards due to higher energy prices.

In short

The estimate for total inflation in the euro area has been raised to 2.7% for 2026 and 2.1% for 2027, while long-term expectations remain at 2.0%.

Core inflation, which excludes energy and food, is estimated at 2.2% in 2026 and 2027 and at 2.1% in 2028.

Real GDP growth is estimated at 1.0% in 2026 and 1.3% in 2027 and 2028, with downward revisions for 2026 and 2027.

The ECB indicates that the revisions are mainly related to the expected impact of higher energy prices generated by the war in the Middle East.

Unemployment expectations remain unchanged at 6.3% in 2026, 6.2% in 2027, and 6.1% in 2028 and in the longer term.

The European Central Bank published the results of the Survey of Professional Forecasters for the second quarter of 2026, which indicates an upward revision of short-term inflation and a downward revision of economic growth for the euro area.

According to the ECB, respondents expect total inflation, measured by the harmonized index of consumer prices, HICP, to be 2.7% in 2026, 2.1% in 2027, and 2.0% in 2028. Estimates for 2026 and 2027 have been revised upwards compared to the previous round, conducted in the first quarter of 2026, while the estimate for 2028 has been revised downwards.

Long-term expectations for 2030 remain unchanged at 2.0%, both for total inflation and for core inflation. The ECB notes that this stability suggests that long-term inflation expectations remain anchored around the 2% level.

Core inflation, which excludes energy, food, alcohol, and tobacco, is estimated at 2.2% in 2026 and 2027 and at 2.1% in 2028. These estimates have also been revised upwards in the short term compared to the previous survey.

The revisions regarding inflation mainly reflect the expected impact of the war in the Middle East and higher energy prices. In the detailed report, the ECB shows that the impact of the conflict on core inflation is estimated at about 0.2 percentage points in 2026, with positive but limited effects persisting until 2028. The impact on wage growth is estimated at about 0.1 percentage points, slightly more visible in 2027.

Respondents believe that the indirect and second-round effects of the conflict will remain limited and concentrated mainly in 2026 and 2027. For alternative scenarios, the highest probability, of about 50%, was assigned to the baseline forecast, while about 25% was assigned to a downside scenario, 10% to a severe scenario, and 15% to an upside scenario.

The ECB shows that the most frequently mentioned factors in the qualitative comments of respondents are oil and energy. Upside risks for inflation include geopolitical developments, especially the war in the Middle East, the risk of continued disruptions around the Strait of Hormuz, the evolution of oil, gas, and other commodity prices, potential supply chain blockages, and uncertainty in trade policy.

On the economic growth side, respondents expect a real GDP increase of 1.0% in 2026, 1.3% in 2027, and 1.3% in 2028. Compared to the previous survey, estimates have been revised downwards by 0.2 percentage points for 2026 and by 0.1 percentage points for 2027, but have remained unchanged for 2028. Long-term expectations for GDP growth, referring to 2030, remain at 1.3%.

The ECB specifies that the downward revisions for economic growth are mainly determined by the expected negative impact of higher energy prices related to the war in the Middle East. In the detailed report, respondents also mention risks regarding private consumption, corporate investments, potential supply blockages, and global trade tensions.

At the same time, unemployment is expected to remain stable. The unemployment rate is estimated at 6.3% in 2026, 6.2% in 2027, and 6.1% in 2028 and in the longer term. The ECB shows that the labor market in the euro area is perceived as resilient, with limited and temporary effects of the conflict in the Middle East.

Wage growth has been revised upwards for 2026 and 2027. Respondents expect compensation per employee to increase annually by 3.3% in 2026, 3.1% in 2027, 2.9% in 2028, and just below 2.8% in 2030. Compared to the previous round, the current profile is higher by 0.3 percentage points for 2026, by 0.2 percentage points for 2027, and by 0.1 percentage points for 2028.

The survey also indicates a significant upward revision of the expected price of oil. Respondents expect a price of about 94 dollars per barrel in the second quarter of 2026, with a strong increase compared to the previous round and a gradual decrease thereafter.

The survey was conducted between March 31 and April 8, 2026, and received 56 responses. The ECB emphasizes that the results do not represent the views of its decision-making bodies or ECB staff. The next macroeconomic projections of the Eurosystem for the euro area will be published on June 11, 2026.

The Survey of Professional Forecasters is a quarterly survey of the European Central Bank that collects expectations regarding inflation, real GDP growth, and unemployment in the euro area, for multiple time horizons. Participants are experts affiliated with financial and non-financial institutions in Europe.

The results for the second quarter of 2026 are relevant for the debate on monetary policy in the euro area, as they show a combination of higher short-term inflation and weaker economic growth. The ECB notes that the shock associated with the war in the Middle East is perceived by respondents as inflationary and as a factor slowing growth, but with a limited duration and more visible effects in 2026 than in 2027.

In comparison with the shock caused by Russia's invasion of Ukraine, the current revisions of inflation and growth expectations are smaller. The report suggests that forecasters expect the effects of the conflict in the Middle East to fade relatively quickly.

https://2eu.brussels/ro/stiri/economistii-consultati-de-bce-ridica-estimarea-de-inflatie-pentru-zona-euro-in-2026