ECB Forecasts Stable Inflation and Moderate Growth for the Eurozone Through 2028

The European Central Bank (ECB) forecasts that eurozone inflation will remain broadly stable over the medium term, according to its latest macroeconomic projections. Headline inflation is expected to average 2.1 percent in 2025, easing slightly to 1.9 percent in 2026, 1.8 percent in 2027, and returning to 2.0 percent in 2028. Core inflation, excluding energy and food, is projected to average 2.4 percent in 2025, gradually declining to 2.2 percent in 2026, 1.9 percent in 2027, and 2.0 percent in 2028.

The upward revision for 2026 reflects the expectation that inflation in the service sector will decline more slowly than previously anticipated. Economic growth forecasts have also been adjusted upward, with domestic demand seen as the primary driver. The ECB now expects gross domestic product to expand by 1.4 percent in 2025, 1.2 percent in 2026, 1.4 percent in 2027, and 1.4 percent again in 2028.

The ECB reiterated its commitment to maintaining inflation around its 2 percent target over the medium term. The bank emphasized that policy decisions will remain data-driven and case-specific, considering the inflation outlook, underlying trends, and the transmission of monetary measures to the broader economy. No fixed path for interest rates has been set, allowing flexibility in responding to evolving economic conditions.