October 30: Professional forecasters surveyed by the European Central Bank have raised their near-term euro-area inflation expectations, citing more persistent energy-price pressures. The fourth-quarter survey, published today, puts headline inflation at 3.0% in 2026 and 2.6% in 2027, while the longer-term expectation remains 2.0%.
Key highlights
- The survey received 52 responses between October 2 and 7.
- 2026 and 2027 headline forecasts rose by 0.3 and 0.4 percentage points.
- The 2028 headline forecast stayed at 2.0%.
- These are respondents’ expectations, not a new ECB policy commitment.
The forecasts at a glance
| Annual measure | 2026 | 2027 | 2028 |
|---|---|---|---|
| Headline HICP inflation | 3.0% | 2.6% | 2.0% |
| Inflation excluding energy and food | 2.4% | 2.5% | 2.2% |
| Real GDP growth | 1.0% | 1.3% | 1.3% |
| Unemployment rate | 6.4% | 6.3% | 6.2% |
The survey’s longer-term horizon refers to 2031. The ECB says respondents’ headline inflation expectations for that horizon remained anchored at 2.0%. The aggregate figures describe a group of forecasters and do not mean that every participant submitted the same estimate.
Why the inflation profile moved
The ECB’s survey report attributes the higher near-term outlook mainly to more persistent energy-commodity prices and additional indirect effects. It says forecasters now expect the disruption associated with the Middle East conflict to last longer than they previously assumed.
An indirect effect occurs when higher energy costs influence the prices of other goods and services. A second-round effect concerns further responses, such as wage and price-setting behaviour. The survey discusses both and continues to describe the expected second-round effects as limited.
That distinction matters because a rise in fuel costs does not automatically establish a lasting wage-price spiral. The report’s risk discussion is conditional and forward-looking. It should not be rewritten as a claim that every possible transmission channel has already occurred.
Forecasts are different from today’s inflation reading
The survey was conducted early in October and published at the end of the month. Its information set therefore predates some later data. The publication date does not make every response an assessment made on October 30.
Annual-average inflation expectations also differ from a single month’s year-on-year inflation rate. A high monthly reading can coexist with a lower annual-average forecast. Comparing them without identifying the period can wrongly imply a contradiction.
The ECB’s September staff projections, reproduced for comparison in the report, are a separate exercise from this survey. Outside professionals’ responses are not the same as the central bank’s own forecast or a Governing Council decision.
Growth improves, but risks remain uneven
Respondents raised their 2026 growth expectation to 1.0%, mainly reflecting stronger recent data. They expect 1.3% growth in both 2027 and 2028. At the same time, the report places growth risks mainly on the downside and inflation risks on the upside over the nearer horizons.
A higher central estimate and a downside risk assessment can coexist. The first is the baseline; the second describes how outcomes might differ if assumptions fail. Businesses should examine both instead of selecting whichever single number supports a preferred outlook.
Why the survey matters in Asia
European inflation and demand affect Asian exporters, while energy costs connect European and Asian importing economies. The survey helps describe those exposures without predicting a particular firm’s revenue or a currency’s next move.
For a business, the useful follow-up is to connect the assumptions to its own contracts: fuel or freight costs, pricing flexibility, customer budgets and settlement currency. An area-wide forecast supplies context but cannot replace those transaction-level details.
What to watch
Fresh inflation releases, wage data and subsequent ECB decisions will test the survey’s assumptions. The published survey is a snapshot of expectations, not a guarantee that inflation follows the displayed path. Its featured portrait is a 2023 file photograph of ECB President Christine Lagarde, not a photograph of survey respondents.
Sources
- ECB: Survey of Professional Forecasters, fourth quarter of 2026
- ECB: Monetary policy decisions, October 29, 2026
The Business Desk covers markets, the economy, companies and personal finance. Stories are checked against at least two credible sources before publication.
