The European Central Bank (ECB) has downgraded its economic growth forecasts for the eurozone for the next two years. The review was published on June 11.
According to the updated data, real GDP in the eurozone will grow by 0.8% in 2026, down from the 0.9% predicted in the March forecast, and by 1.2% in 2027, down from 1.3%.
"Short-term indicators point to subdued economic growth in the near term, as higher energy prices and increased uncertainty weigh on domestic demand," the document notes.
At the same time, the ECB significantly raised its inflation forecasts. The Harmonised Index of Consumer Prices (HICP) is expected to be 3% in 2026, up from the previous 2.6%, and 2.3% in 2027, up from 2.0%. The rise in inflation is linked to a sharp increase in energy costs and the gradual pass-through of these effects to prices of other goods and services.
Earlier, on April 30, reporters from The Wall Street Journal reported that the eurozone economy slowed in the first quarter due to a surge in energy prices caused by the Middle East conflict.