ECB Forecasters Trim 2025 Inflation View to 2.0% on Tariff Effect

The European Central Bank’s latest Survey of Professional Forecasters shows respondents lowering their outlook for euro-area inflation to 2.0% in 2025, down from 2.2% in the prior survey. Expectations for 2026 were cut to 1.8% from 2.0%, while medium-term projections for 2027 were little changed. Forecasters attribute part of the downward revision to recently imposed trade barriers, estimating that tariffs will shave roughly 0.06 percentage point off consumer-price growth in both 2025 and 2026 and have a broadly neutral impact thereafter. Despite the softer inflation profile, the panel now sees the bloc’s gross domestic product expanding 1.1% next year, an upgrade from 0.9%, before easing slightly to 1.1% in 2026, compared with 1.2% previously. The findings suggest modestly stronger demand but reinforce expectations of price pressures moving closer to the ECB’s 2% target.