ECB’s Q2 survey reveals modest rise in inflation forecasts

Published 22/04/2025, 09:34
© Reuters.

Investing.com -- The European Central Bank’s (ECB) second-quarter 2025 Survey of Professional Forecasters showed slight upward revisions to headline inflation expectations for 2025 and 2026, now projected at 2.2% and 2.0% respectively, alongside modest adjustments to growth forecasts.

However, these expectations remain unchanged for 2027.

The core HICP inflation, which excludes the impact of energy and food, also saw a minor upward revision across all horizons. Despite these adjustments, long-term expectations for headline inflation remain steady at 2.0%.

The survey also highlights the influence of tariffs and defense spending as key factors behind these revisions to inflation and growth expectations.

In terms of real GDP growth, the expectations for 2025 and 2026 have been revised down by 0.1 percentage points, with forecasts now standing at 0.9% and 1.2% respectively.

Conversely, the growth expectation for 2027 has been revised upwards by 0.1 percentage points to 1.4%.

The long-term growth expectations, however, remain unchanged at 1.3%.

The survey further indicates a slight downward revision in unemployment rate expectations for 2025, 2026, and the longer term. The unemployment rate is now expected to average 6.3% from 2025 to 2027, before falling to 6.2% in the longer term.

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