The European Central Bank's (ECB) quarterly Survey of Professional Forecasters (SPF) projects that the inflation rate in the Eurozone will average 2.7% in 2026. This figure is expected to decline to 2.1% in 2027 and further to 2% in 2028, indicating a gradual return toward the ECB's inflation target over the coming years. In terms of economic growth, the survey forecasts Eurozone Gross Domestic Product (GDP) to grow by 1% in 2026, which is a downward revision from the 1.2% growth projected in the previous survey [1].
Market reaction to the release of the SPF was modestly negative for the euro. The EUR/USD currency pair remained under bearish pressure during the European session on Monday, last trading at 1.1710, representing a decline of about 0.1% on the day [1].
The updated forecasts suggest that while inflation is expected to moderate, it will remain above the ECB's 2% target for several years. The downward revision in GDP growth expectations may reflect concerns about the pace of economic recovery in the Eurozone [1].
CONCLUSION
The ECB's latest SPF indicates persistent inflation above target through 2026 and a slight downgrade in growth expectations. The euro responded with a modest decline, reflecting cautious market sentiment following the release.