Economic growth expectations improved in the short term in the latest survey of professional forecasters from the European Central Bank (ECB), with inflation forecasts also easing.
The latest survey, which was carried out in early July, saw an upward revision in expectations for real GDP growth to 1.1%, an increase of 0.2 percentage points. However, the forecast for 2026 was trimmed by 0.1 points to 1.1%.
“Growth expectations for 2027 and for the longer term remained unchanged at 1.4% and 1.3%, respectively,” the ECB said.
At the same time, headline inflation expectations for 2025 and 2026 were revised down by 0.2 points to 2% and 1.8%, respectively. Inflation forecasts for 2027 were also unchanged.
“Expectations for core inflation, which excludes energy and food, were revised down slightly for 2026 and 2027,” the ECB said. “Longer-term expectations for both headline inflation and core HICP inflation were unchanged at 2%.”
The expected trajectory of the unemployment rate was also broadly unchanged, the central bank said.
“The unemployment rate is expected to average 6.3% in 2025 and 2026 and then to fall to 6.2% in 2027, where it is expected to remain in the longer term (expectations for 2027 were revised marginally down by 0.1 percentage points),” it noted.