Results of the ECB Survey of Professional Forecasters for the Second Quarter of 2026

Why It Matters

Rising inflation expectations keep pressure on the ECB to maintain a restrictive monetary stance, while weaker growth forecasts signal slower recovery and could shape fiscal and investment decisions across the eurozone.

Key Takeaways

• Headline HICP inflation expectations rise to 2.7% for 2026
• Core inflation expectations increase to 2.2% for 2026‑27
• Real GDP growth outlook trimmed to 1.0% in 2026
• Unemployment expectations stay near 6.3% through 2028
• Higher energy prices cited as main driver of revisions

Pulse Analysis

The latest ECB Survey of Professional Forecasters underscores a subtle but meaningful shift in euro‑area inflation dynamics. Near‑term headline HICP inflation is now seen at 2.7% for 2026, up from 1.8% a quarter ago, while core inflation—excluding volatile energy and food—has risen to 2.2%. These upward revisions reflect lingering price pressures from elevated energy costs, keeping inflation above the ECB’s 2% target and suggesting that policymakers may need to sustain higher interest rates longer than previously anticipated.

Growth expectations have been revised downward, with real GDP growth projected at just 1.0% for 2026, down 0.2 percentage points from the prior survey. The downgrade stems largely from the anticipated negative impact of higher energy prices tied to the ongoing Middle‑East war, which dampens consumer spending and industrial output. A slower growth trajectory could constrain fiscal buffers and limit corporate investment, prompting governments and businesses to reassess budgeting and expansion plans amid a more cautious economic environment.

Labor market outlook remains relatively unchanged, with unemployment hovering around 6.3% in 2026 and gradually easing to 6.1% by 2028. Wage growth expectations, however, have edged up, indicating that labor costs may rise even as joblessness stays stable. Together, these signals paint a picture of an economy grappling with stubborn inflation, modest growth, and a tight labor market—factors that will likely keep the ECB’s policy deliberations focused on balancing price stability with the need to support a fragile recovery.