Financial-sector forecasters expect higher inflation in the eurozone in 2026 and 2027, a European Central Bank (ECB) survey shows. They point to higher energy prices and longer-lasting effects of the war in the Middle East. Their estimates for economic growth are also better.
The survey for the fourth quarter of 2026 covered 52 professional forecasters and ran from 2 to 7 October. The figures are the forecasters' own estimates and differ from the official projections of ECB staff.
They say prices, measured by the Harmonised Index of Consumer Prices, will rise by an average of 3% in 2026 and 2.6% in 2027. That is 0.3 and 0.4 percentage points higher than in the previous survey, respectively. The forecast for 2028 is unchanged at 2%.
Core inflation, which leaves out energy and food, stays at 2.4% for 2026. Forecasters raised their 2027 figure by 0.2 points to 2.5%, and their 2028 figure by 0.1 points to 2.2%. By 2031, both headline and core inflation fall back to 2%. The report says this shows confidence remains that prices will return for good to the ECB's target.
The conflict in the Middle East began in late February 2026. Many of the forecasters now expect it to last 10 to 12 months. In the previous survey they expected one to three. They say disruption to energy and goods supplies will last 10 to 24 months, instead of up to 12. As a result, they also raised their assumptions for the oil price.
They put the indirect effect of the conflict on prices at about 0.25 points in 2026 and 0.3 points in 2027, which is 0.2 points more than before. In 2028 the effect is limited. Higher energy prices raise production costs, and in turn the price of industrial goods, food and transport.
If people and firms try to win back lost purchasing power through higher wages and profits, this would add about 0.1 points to inflation in 2027.
Growth in gross domestic product (GDP) is expected to be 1% in 2026, up 0.4 points, mostly because the latest data was better than expected. The forecast for 2027 is 1.3% (up 0.1 points), for 2028 it stays at 1.3%, and in the long term it is also 1.3%, up 0.1 points.
In September, ECB staff projected growth of 0.9%, 1.4% and 1.5% for the three years. So the forecasters see a slightly stronger 2026 and weaker growth in the next two years.
Unemployment is expected to be 6.4% in 2026, up 0.1 points, then fall to 6.3%, 6.2% and 6.1% in 2031.
Average pay per employee, before inflation is taken into account, will rise by 3.3% in 2026 and 3.1% in 2027, in both cases 0.1 points above the earlier forecast. For 2028 the rise stays at 2.8%, and in the long term it is cut by 0.2 points to 2.7%.
Expectations for the ECB deposit rate, which banks earn on money they leave with the central bank, are also rising. For the fourth quarter of 2026, 48% of respondents see the rate at 2.5%, while 43% expect a rise to 2.75%. In later periods the most common forecast is 2.75%, and in 2028 the rate returns to 2.5%.
The euro is still expected to gain gradually against the dollar, but forecasts to 2028 are lower than in the previous survey.
Risks to growth lean mainly to the downside in all periods, while risks to inflation lean to the upside in 2026–2028. The forecasters name geopolitical tension and possible new cuts in energy supplies as the main sources of uncertainty.