Professional forecasters surveyed by the European Central Bank have raised their inflation expectations for 2026 and 2027, according to the bank’s fourth-quarter Survey of Professional Forecasters. Respondents now expect headline HICP inflation of 3.0 percent in 2026, and 2.6 percent in 2027. Both figures are higher than in the previous survey, by 0.3 and 0.4 percentage points respectively.
Energy prices drive the revision
The upward revision came mainly from higher energy prices and their indirect effects, the ECB said. Forecasters expect headline inflation to fall back to 2.0 percent in 2028, the same level they expect over the longer term.
Longer-term inflation expectations remained anchored at 2.0 percent for both headline and core measures. A special question on the war in the Middle East found that most of the additional energy price effects are expected in 2027, with second-round effects limited.
Growth and jobs outlook
Forecasters raised their 2026 real GDP growth expectation by 0.4 percentage points, to 1.0 percent. For 2027 they see growth of 1.3 percent, up 0.1 points, and the same 1.3 percent for 2028.
Unemployment expectations were revised up slightly for 2026, to 6.4 percent. The longer-term unemployment expectation stands at 6.1 percent. The survey drew 52 responses.
Balance of risks
The risks to inflation tilt to the upside for 2026 to 2028, and become more balanced after that. For real GDP growth, the balance of risks leans somewhat to the downside across all horizons.
The Eurosystem’s next staff macroeconomic projections are due on 18 December 2026. The survey is conducted quarterly and does not represent the views of ECB decision-making bodies or staff.
Related: Turkish households' inflation outlook falls, lira view weakens
Source: European Central Bank
