Euro zone inflation will continue easing, may fall below 2% in 2026, ECB survey shows By Reuters

FRANKFURT (Reuters) – Euro zone inflation will continue to slow in the coming years and could dip below the European Central Bank’s 2% target by 2026%, an ECB survey showed on Friday.

The ECB has overshot its target for years and jacked up interest rates to record highs last year to tame price pressures, but it could still take until the end of 2025 to get back to its goal.

The bank’s quarterly Survey of Professional Forecasters, an input in policy deliberations, sees inflation slowing even quicker than ECB staff predict and expects price growth then to steady around the ECB’s target.

Inflation this year could average 2.4%, in line with the survey’s prediction three months ago and could then slow to 2.0% next year, as predicted earlier, both below the ECB’s own in-house projections.

By 2026, inflation could dip to 1.9% but over the long term – defined as 2028 – it will be at 2%.

The ECB left interest rates unchanged on Thursday but kept the door open to further policy easing, partly as economic growth appears weak, pointing to easing prices pressures from output.

Survey respondents raised their growth projection to 0.7% this year from 0.5% but cut next year’s forecast to 1.3% from 1.4%.