The European Central Bank (ECB) revised upwards its inflation projections for the Eurozone over the coming years, abandoning the expectation of reaching the 2% target by 2028. According to the ECB staff's baseline scenario, inflation is expected to remain at 3% in 2026, slow to 2.5% in 2027 and settle at 2.1% in 2028.
The previous projections, released in June, pointed to lower values: 3% in 2026, 2.3% in 2027 and 2% in 2028. Thus, the projection for 2027 was revised upwards by 0.2 percentage points, while that for 2028 rose by 0.1 percentage points, with only the 2026 projection remaining unchanged.
Regarding inflation excluding energy and food products, the ECB forecasts 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028. This measure, known as core inflation, shows that prices will remain above target even when the more volatile components are excluded.
As for economic growth, the ECB revised its expectations upwards, projecting growth of 0.9% in 2026, 1.4% in 2027 and 1.5% in 2028. This revision mainly reflects the stronger-than-expected resilience of the euro area economy. The institution is led by Christine Lagarde.
