ECB Survey Lifts 2026 Eurozone Inflation to 2.7%

The European Central Bank's quarterly Survey of Professional Forecasters has projected eurozone inflation to average 2.7 percent in 2026, above the institution's 2 percent target, signaling ongoing price pressures amid elevated energy costs and wage growth. The survey, which polls around 60 economists from financial institutions, research bodies and academia, was released this week in Frankfurt.

This represents an upward revision from the prior quarter's forecast of 2.5 percent for 2026, with core inflation, excluding volatile energy and food prices, expected at 2.4 percent. Forecasters anticipate a gradual decline thereafter, to 2.2 percent in 2027 and 2.0 percent in 2028. Economic growth projections were trimmed, with GDP expansion now seen at 1.0 to 1.5 percent in 2026, down from earlier estimates, reflecting impacts from geopolitical tensions. Unemployment is forecast to remain stable near historic lows, around 6.3 percent.

Key drivers include persistent wage increases fueled by tight labor markets, volatile energy prices linked to conflicts in Ukraine and the Middle East, ongoing supply chain adjustments and fiscal spending in some member states. Recent data showed eurozone...