The eurozone economy is projected to grow by 0.8% in 2026 and by 1.2% next year, according to a statement from the European Central Bank (ECB) following its June meeting.
Three months ago, the regulator had forecast growth of 0.9% and 1.3%, respectively.
Economic growth in 2028 is now expected to reach 1.5%, up from the previous forecast of 1.4%.
Consumer prices will rise by 3% this year, up from the previously projected 2.6%, the report states. The forecast for 2027 has been revised to 2.3% from 2%.
The ECB also expects inflation in 2028 to be 2%, rather than 2.1%.
Consumer prices excluding energy and food (core inflation) will rise by 2.5% in 2026 (previously expected to be 2.3%), by 2.5% next year (2.2%), and by 2.2% in 2028 (2.1%).
The revision of inflation forecasts is due to a more significant increase in energy prices. At the same time, the deterioration in economic growth estimates “reflects the more pronounced impact of the war in the Middle East on commodity markets, real incomes, and confidence,” the ECB noted in its statement.
