The Eurozone economy is expected to grow more slowly, with prices rising faster than anticipated. This conclusion comes from a recent survey of professional forecasters conducted by the European Central Bank for the third quarter of 2026. The study, which aggregates July estimates from 53 European experts, revealed a deterioration in macroeconomic expectations.

Analysts have significantly lowered their forecasts for real GDP growth. In 2026, the bloc’s economy is expected to expand by only 0.6%, which is 0.4 percentage points below the prior estimate. The forecast for 2027 has also been cut to 1.2%. For 2028, expectations remain at 1.3%, but long-term growth prospects up to 2031 have been revised downward to a modest 1.2%.

Simultaneously, experts have raised their inflation growth projections. Overall inflation is expected to reach 2.7% in 2026, dropping to 2.2% in 2027 (a 0.1 percentage point upward revision). Core inflation, which excludes volatile food and energy prices, is anticipated to hit 2.4% in 2026, 0.2 percentage points above previous estimates. Price pressure is not expected to return to the target of 2.0% until 2028. Analysts assess the risk balance for inflation this year as tilted toward the upside.

The labor market is also showing signs of slight cooling. Unemployment forecasts for 2027 and 2028 have been revised upward by 0.1 percentage points. Experts predict that the unemployment rate will be 6.3% over the next two years, gradually decreasing to 6.2% in 2028 and 6.1% in the long term.

In addition, forecasters assessed the impact of the war in the Middle East on the European economy. They believe that the indirect and secondary macroeconomic effects of the conflict will remain limited and will largely dissipate throughout 2026.