Survey of Professional Forecasters - Fourth Quarter of 2026 (European Central Bank)
Summary
- Headline inflation expectations were revised upward by 0.3 percentage points to 3.0% for 2026 and by 0.4 percentage points to 2.6% for 2027, while staying unchanged at 2.0% for 2028.p.3
- Core inflation expectations remain unchanged at 2.4% for 2026, but were revised up by 0.2 percentage points to 2.5% for 2027 and by 0.1 percentage points to 2.2% for 2028.p.3
- Real GDP growth expectations were revised up to 1.0% for 2026 and are projected at 1.3% for 2027, 2028 and the longer term.p.3
- The unemployment rate is projected to decline gradually from 6.4% in 2026 to 6.1% over the longer term.p.3
- Longer-term inflation expectations remain anchored at 2.0%, with 68% of respondents expecting exactly 2.0%.p.11
- Indirect effects from the Middle East conflict on inflation are estimated at 0.25 percentage points in 2026 and 0.3 percentage points in 2027.p.5
Key insights
- 1. Headline inflation expectations rose to 3.0% in 2026 and 2.6% in 2027 primarily due to persistent energy commodity prices and related indirect pass-through effects.p.3
- 2. Longer-term headline inflation expectations remain firmly anchored at 2.0%, with 68% of panellists projecting exactly this figure.p.11
- 3. Real GDP growth forecasts were upgraded to 1.0% in 2026, driven by stronger-than-expected first-half data and resilient investment in AI.p.12
- 4. Indirect effects of the Middle East conflict are expected to peak at 0.3 percentage points in 2027 before largely dissipating by 2028.p.5
- 5. Second-round effects on inflation are expected to remain fairly limited at around 0.1 percentage points in 2027.p.5
- 6. The duration of the energy shock was deemed very relevant for wage developments by 70% of respondents, compared to 50% for the shock size.p.6
- 7. Inflation risks remain tilted to the upside through 2028, whereas risks to GDP growth are predominantly on the downside across all horizons.p.14
- 8. For the ECB deposit facility rate, the modal expectation for the fourth quarter of 2026 is 2.50%, with 43% expecting a rate of 2.75%.p.15
Topics and entities
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