ECB
The European Central Bank has trimmed its inflation forecasts while maintaining a cautious outlook on growth, according to its latest economic projections released today.
The latest projections suggest the ECB’s fight against inflation is making progress, though the path to its 2% target remains gradual. The muted growth outlook could add pressure for rate cuts in the coming months. The market is nearly fully priced for another 25 bps cut in January.
HICP Inflation:
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- 2024: Lowered to 2.4% (from 2.5%)
- 2025: Lowered to 2.1% (from 2.2%)
- 2026: Lowered to 1.9% (from 2.0%)
- 2027: New forecast of 2.1%
Core HICP (ex-energy & food):
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- 2024: Unchanged at 2.9%
- 2025: Unchanged at 2.3%
- 2026: Lowered to 1.9% (from 2.0%)
- 2027: New forecast of 1.9%
GDP growth:
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- 2024: Lowered to 0.7% (from 0.8%)
- 2025: Lowered to 1.1% (from 1.3%)
- 2026: Lowered to 1.4% (from 1.5%)
- 2027: New forecast of 1.3%