Euro area professional forecasters raised their 2026 headline inflation expectation to 3.0% from 2.7% and 2027 to 2.6% from 2.2%, citing higher energy prices and indirect effects, while keeping longer-term inflation anchored at the ECB's 2.0% target. GDP growth expectations were lifted to 1.0% for 2026 and 1.3% for 2027-28.
Key Takeaways
- Headline inflation expectations: 3.0% (2026), 2.6% (2027), 2.0% (2028) — up 0.3pp and 0.4pp for 2026-27
- Longer-term (2031) inflation expectations anchored at 2.0% for both headline and core
- GDP growth revised up: 1.0% (2026), 1.3% (2027-28); longer-term 2031 growth at 1.3%
- Unemployment seen at 6.4% in 2026, falling to 6.1% longer term
- Inflation risks upside for 2026-28; growth risks downside for all horizons
Executive Intelligence Brief
Inflation Expectations Revised Up on Energy Pass-Through
The Survey of Professional Forecasters (SPF) for the fourth quarter of 2026, conducted between 2 and 7 October with 52 respondents, shows headline HICP inflation expected at 3.0% in 2026, 2.6% in 2027, and 2.0% in 2028. Compared with the Q3 2026 round, this represents upward revisions of 0.3 and 0.4 percentage points for 2026 and 2027 respectively, while 2028 was unchanged. Core inflation expectations (HICP excluding energy and food) were also revised up for 2026 and 2027, though the ECB did not publish the precise core figures in the press release.
Longer-term expectations for 2031 remained at 2.0% for both headline and core inflation, indicating that forecasters view the current overshoot as temporary. A special question on the Middle East war suggested additional energy price shock effects mainly for 2027, with second-round effects expected to remain limited. The balance of risks to inflation is tilted to the upside for 2026-28 but more balanced thereafter.
Growth Outlook Improves on Recent Data
Real GDP growth expectations were revised up to 1.0% for 2026 (from 0.6%) and 1.3% for 2027 (from 1.2%), with 2028 unchanged at 1.3%. Longer-term growth expectations for 2031 were nudged up 0.1 percentage points to 1.3%. The improvement primarily reflects recent data surprises. However, the balance of risks to growth is tilted somewhat to the downside for all horizons, suggesting forecasters see headwinds persisting despite the near-term upgrade.
Labour Market and Policy Rate Context
Unemployment rate expectations were slightly higher for 2026 at 6.4%, before declining gradually to 6.1% in the longer term. The survey also collects expectations for the ECB's deposit facility rate, the euro-dollar exchange rate, Brent crude oil prices, wages, and the output gap, though these granular results were not detailed in the headline release. The survey results do not represent the views of the ECB's decision-making bodies or its staff.
Forward Outlook and Next Milestones
The next Eurosystem staff macroeconomic projections for the euro area will be published on 18 December 2026, providing the ECB's official baseline against which these private forecasts can be benchmarked. The next SPF round (Q1 2027) will be conducted in January 2027. Before then, the October euro area HICP flash estimate, due 31 October 2026, will offer the first hard data test of whether energy pass-through is tracking in line with forecasters' assumptions.
