The ECB has struggled with runaway inflation over the past three years but started to lower interest rates from record highs in June as price pressures are clearly moderating.
Weak growth is one of the key reasons why inflation is easing and gross domestic product (GDP) in the 20 countries sharing the euro is now seen expanding by 0.8% this year, below a 0.9% projection made three months ago.
Inflation is seen at 2.2% next year, above the ECB’s 2% target but the trajectory of the forecasts suggests a fall to target in the second half of the year.
The following are the ECB’s projections for inflation and economic growth. Previous projections from June are in brackets.
2024 2025 2026
GDP growth: 0.8% (0.9%) 1.3% (1.4%) 1.5% (1.6%)
Inflation: 2.5% (2.5%) 2.2% (2.2%) 1.9% (1.9%)
Core inflation: 2.9% (2.8%) 2.3% (2.2%) 2.0% (2.0%)
(This story has been corrected to fix the new 2026 GDP forecast in table to 1.5%, not 1.6%)
Source: Economy - investing.com
