ECB survey: forecasters raise euro area inflation expectations for 2026 and 2027
Professional forecasters surveyed by the ECB expect headline inflation of 3.0% in 2026 and 2.6% in 2027, up 0.3 and 0.4 percentage points, with longer-term expectations anchored at 2.0%.
AI illustrationProfessional forecasters surveyed by the European Central Bank have raised their inflation expectations for the euro area for 2026 and 2027, mainly because of higher energy prices and their indirect effects, while longer-term expectations stayed anchored at 2.0%, the ECB said on 30 October.
In the Survey of Professional Forecasters for the fourth quarter of 2026, respondents expected headline inflation, measured by the HICP, of 3.0% in 2026, 2.6% in 2027 and 2.0% in 2028. The figures for 2026 and 2027 were revised up by 0.3 and 0.4 percentage points respectively from the previous round, while the 2028 figure was unchanged. Longer-term expectations, which refer to 2031, remained at 2.0% for both headline and core inflation.
Core inflation, which excludes energy and food, was expected at 2.4% in 2026, 2.5% in 2027 and 2.2% in 2028. The ECB said the balance of risks for inflation was tilted to the upside for 2026-28 but remained more balanced thereafter.
A special question, also asked in the previous round, concerned the impact of the war in the Middle East. According to the ECB, the responses suggested that additional effects of the energy price shock are mainly expected for 2027, while second-round effects will remain limited.
Growth expectations were also revised up, primarily reflecting recent data. Respondents expected real GDP growth of 1.0% in 2026 and 1.3% in both 2027 and 2028, up 0.4 percentage points for 2026 and 0.1 percentage points for 2027 compared with the previous survey, and unchanged for 2028. Longer-term growth expectations rose by 0.1 percentage points to 1.3%. The balance of risks for growth was tilted somewhat to the downside for all horizons, the ECB said.
Unemployment rate expectations were slightly higher for 2026, at 6.4%, before declining gradually to 6.1% in the longer term. Wage growth was expected at 3.3% in 2026, 3.1% in 2027 and 2.8% in 2028.
The survey was conducted between 2 and 7 October 2026 and received 52 responses. The ECB said the results do not represent the views of its decision-making bodies or its staff. The next Eurosystem staff macroeconomic projections for the euro area are due on 18 December 2026.