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EU headline inflation to dip from 2024's 2.4% to 2% in 2025, 2026: ECB

13 Apr '24

2 min read

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Inflation expectations across the EU remain unchanged across all horizons, a European Central Bank survey found.
Longer-term inflation expectations stand at 2 per cent, while real GDP growth expectations remain broadly unchanged.
Economic activity is expected to strengthen gradually throughout 2024.
Unemployment rate expectations are largely unchanged.

Headline inflation in the European Union (EU), measured in terms of the harmonised index of consumer prices (HICP), is expected to decline from 2.4 per cent this year to 2 per cent in both 2025 and 2026, according to the European Central Bank’s (ECB) survey of professional forecasters for the second quarter (Q2) this year.

Expectations for core HICP inflation, which excludes energy and food, also remained unchanged between 2024 and 2026. Longer-term expectations for headline and core HICP inflation were unchanged at 2 per cent, an ECB release said.

Respondents expected real gross domestic product (GDP) growth of 0.5 per cent this year, 1.4 per cent in 2025 and 1.4 per cent in 2026.

Compared with the previous survey round, the expectations for 2024 and 2025 were revised down and up by 0.1 percentage point respectively, while those for 2026 were unchanged.

Respondents’ short-term GDP outlook was for a gradual strengthening of economic activity throughout this year. Longer-term growth expectations remained unchanged at 1.3 per cent.

The expected profile of the unemployment rate was revised downwards slightly over the entire horizon. Respondents continued to expect the unemployment rate to increase this year, to 6.6 per cent, but to decline to 6.5 per cent in 2026 and to 6.4 per cent in the longer term.

Fibre2Fashion News Desk (DS)

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