www.ecb.europa.eu ©
Outlook for the
euro area economy
MacGill Summer School
Philip R. Lane
Member of the Executive Board
Glenties, Co. Donegal,
24 July 2026
0
Rubric
www.ecb.europa.eu©
Sources: Refinitiv and ECB staff calculations.
Notes: Black vertical line refers to the current quarter. The latest
percentile paths show the corresponding percentiles of the option-implied
distributions from the fourth quarter of 2026 onwards. The estimates
have been updated using data as of 23 July and recentred around the
latest futures curves. The latest observations are for 23 July 2026.
Oil prices
Outlook and scenarios for energy commodity prices
Sources: Refinitiv and ECB staff calculations.
Notes: Black vertical line refers to the current quarter. The latest
percentile paths show the corresponding percentiles of the option-implied
distributions from the fourth quarter of 2026 onwards. The estimates
have been updated using data as of 23 July and recentred around the
latest futures curves. The latest observations are for 23 July 2026.
Gas prices
Sources: Refinitiv and ECB staff calculations.
Notes: Black vertical line refers to the current quarter. The SECPI is
computed as a weighted average of oil and gas prices. The latest
percentile paths show the corresponding percentiles of the option-implied
distributions from the fourth quarter of 2026 onwards. The estimates
have been updated using data as of 23 July and recentred around the
latest futures curves. The latest observations are for 23 July 2026.
Synthetic energy commodity
price index (SECPI) (USD per barrel) (EUR/MWh)
(USD index)
1
30
40
50
60
70
80
90
100
110
120
2026 2027 2028
Dec 25 projections
June 2026 baseline
June milder scenario
June adverse scenario
June severe scenario
Latest future curve - cut-off 23 July
Latest 25th percentile
Latest 75th percentile
Latest 95th percentile
10
20
30
40
50
60
70
80
90
100
110
120
130
140
2026 2027 2028
Dec 25 projections
June 2026 baseline
June severe scenario
June adverse scenario
June milder scenario
Latest future curve - cut-off 23 July
Latest 25th percentile
Latest 75th percentile
Latest 95th percentile
50
70
90
110
130
150
170
2026 2027 2028
Dec 25 projections
June 2026 baseline
June severe scenario
June adverse scenario
June milder scenario
Latest future curve - cut-off 23 July
Latest 25th percentile
Latest 75th percentile
Latest 95th percentile
Rubric
www.ecb.europa.eu©2
Exchange rates and commodity prices
Source: ECB calculations.
Notes: Nominal effective exchange rate (NEER) denoted in euro for 17 trading partners
(NEER 17). Projections correspond to 10-day rolling averages. “June GovC” refers to 10
June 2026. The latest observations are for 23 July 2026.
USD/EUR and NEER
Sources: London Stock Exchange Group (LSEG), Hamburgisches WeltWirtschaftsInstitut
(HWWI) and ECB calculations.
Notes: “June GovC” refers to 10 June 2026. Food refers to the HWWI food price index
using import-based weights. The latest observations are for 17 July 2026 (weekly data).
Non-energy commodities
(left-hand scale: level; right-hand scale: index: 1999 = 100) (index: 2020 = 100)
130
140
150
160
170
180
190
200
210
220
01/25 07/25 01/26 07/26
Metals Food
June GovC
17/07/26
188.61
174.5
90
95
100
105
1.0
1.1
1.2
1.3
01/25 07/25 01/26 07/26
USD/EUR NEER 17 (right-hand side)
1.14
99.79
23/07/26
June GovC
Rubric
www.ecb.europa.eu©3
Sources: Haver and ECB staff calculations.
Note: The latest observations are for the first quarter of 2026.
Sources: Haver and ECB staff calculations.
Note: The latest observations are for the first quarter of 2026.
World (excl. euro area) import growth
Global growth and trade
World (excl. euro area) real GDP growth
(quarter-on-quarter percentage changes) ( quarter-on-quarter percentage changes)
0.0
0.5
1.0
1.5
2.0
2.5
Q1 Q2 Q3 Q4 Q1
2025 2026
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Q1 Q2 Q3 Q4 Q1
2025 2026
Rubric
www.ecb.europa.eu©4
Sources: HSBC, S&P Global, Haver Analytics and ECB staff calculations.
Notes: “Avg. others” reports the average supply shortages by non-energy intensive sectors
and PMI reports purchasing managers’ index. The latest observations are for June 2026.
Sources: S&P, Haver and ECB staff calculations.
Notes: The chart decomposes the average deviation of sectoral delivery times between
March and June from the long-run average. Results are obtained from bivariate Vector
Autoregressive (VAR) models estimated by sector using demeaned PMI output and PMI
suppliers’ delivery times indices. The models are identified with sign restrictions. Positive
supply shocks are constrained to improve output and delivery times on impact, while
positive demand shocks are constrained to increase output and lengthen delivery times.
The latest observations are for June 2026.
Global PMI supply delivery times
(index)
Supply shortages and delivery times
PMI supply shortages
(average contribution of shocks between March and June 2026)
02468 1 0 1 2 1 4
Avg. others
Chemicals
Aluminium
Stainless Steel
Polymers
Oil
All Items
June 2026 May 2026 February 2026
Supply bottlenecks (2021)
-4 -3 -2 -1 0 1
Chemicals
Technology
equipment
Resources
Automobiles
Household
products
Industrial goods
Food
Demand Supply PMI
Longer
delivery times
Rubric
www.ecb.europa.eu©
Sources: National sources via Haver Analytics and ECB staff
calculations.
Notes: Difference in percentage points between average annual
manufacturing producer price index growth, March-May 2026 (war) vs.
December-February 2026 (pre-war). The latest observations are for May
2026.
- 1 0123456789 1 0 1 1
Taiwan
Thailand
Korea
Malaysia
Sweden
United States
Canada
Chile
Norway
Poland
Czech Rep.
Hungary
India
Denmark
Japan
Russia
Turkey
Global excl. EA
Brazil
China
Romania
Colombia
Indonesia
United Kingdom
Argentina
Mexico
Switzerland
Sources: Drewry and ECB staff calculation.
Notes: Spot freight rates for major east-west trade routes, sourced from
freight forwarders/non-vessel operating common carriers in Europe,
North America and Asia. The latest observations are for 23 July 2026.
Freight rate
(USD/40 ft container)
5
Producer price inflation:
manufacturing
(percentage points)
Imports by category and global pipeline price pressures
(year-on-year percentage change, percentage
points)
de-meaned)
Sources: Trade data monitor (TDM) and ECB staff calculations.
Notes: Nominal import values. Percentage changes and contributions
are deviations from the 2019-23 mean. AI-related/semiconductors
category include AI-related items, semiconductors (upstream and
downstream) and other high-tech sub-categories. The latest
observations are for April 2026.
World (excl. euro area) goods
imports: by category
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2024 2025 Jan-Feb
2026
Mar-Apr
2026
Other
AI-related, semiconductors
Energy intensive
Energy
Total
Rubric
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United States and China: Outlook for activity
Sources: Consensus Economics (CE), Federal Open Market Committee and ECB staff
calculations.
Notes: CE series are calculated for each business day as a moving average of the latest
revised forecasts. The latest observations are for 3 July 2026 (CE).
US: Consensus Economics
GDP forecasts
Sources: Consensus Economics (CE), Federal Open Market Committee and ECB staff
calculations.
Notes: CE series are calculated for each business day as a moving average of the latest
revised forecasts. The latest observations are for 3 July 2026 (CE).
China: Consensus Economics
GDP forecasts
(year-on-year percentage changes, moving average) (year-on-year percentage changes, moving average)
1.9
2.0
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
02/26 03/26 04/26 05/26 06/26 07/26
2026 2027
03/07/26
4.2
4.3
4.4
4.5
4.6
4.7
4.8
02/26 03/26 04/26 05/26 06/26 07/26
2026 2027
03/07/26
Rubric
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Short-term outlook
Source: S&P Global.
Notes: Dashed lines indicate the average values from 2015 to 2019. The latest observations are for July 2026.
PMI indicators: composite and sectoral activity
(diffusion indices)
ServicesManufacturingComposite
45
50
55
60
65
01/26
02/26
03/26
04/26
05/26
06/26
07/26
45
50
55
60
65
01/26
02/26
03/26
04/26
05/26
06/26
07/26
45
50
55
60
65
01/26
02/26
03/26
04/26
05/26
06/26
07/26
Output
New orders
Expected activity
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-4
-3
-2
-1
0
1
2
3
4
5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Private consumption deflator (negative)
Savings (negative)
Non-labour income
Labour income
Private consumption
2025 2026
-2
-1
0
1
2
-0.6
-0.3
0.0
0.3
0.6
Private consumption
Consumer confidence (right-hand scale)
Consumer expected activity (right-hand scale)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2025 2026
8
Private consumption
Sources: Eurostat, European Commission, Eurosystem and ECB calculations.
Notes: High-frequency indicators have been standardised since January 1999. Consumer
expected activity refers to 3-month-ahead weighted production (manufacturing),
employment (construction), business (retail trade) and demand (services) with full
international and global accounts for research in input-output analysis weights. The latest
observations are for the first quarter of 2026 for private consumption, June 2026 for
consumer expected activity and July 2026 for consumer confidence.
Private consumption and high-frequency
indicators
Sources: Eurostat, Eurosystem and ECB calculations.
Notes: From the second quarter of 2026 onwards, Eurosystem June 2026 staff
macroeconomic projections. The latest observations are for the first quarter of 2026.
Private consumption and income and
savings components
(left-hand scale: quarter-on-quarter percentage changes;
right-hand scale: standardised balances)
(year-on-year changes, percentages and percentage points)
Rubric
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-15
-10
-5
0
5
10
15
-3
-2
-1
0
1
2
3
Housing investment
Composite building construction output
EC composite building trend activity (right-hand scale)
PMI housing output - 50 (right-hand scale)
2025 2026
Q1 Q2 Q3 Q4 Q1 Q2
-16
-12
-8
-4
0
4
8
12
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Q1 Q2 Q3 Q4 Q1 Q2
Contribution from intellectual property products
Contribution from tangibles
EC confidence capital goods (right-hand scale)
EC confidence intangibles (right-hand scale)
2025 2026
9
Housing and business investment
Sources: Eurostat, European Commission (EC), Eurosystem, S&P Global and ECB
calculations.
Notes: Composite building indicators combine building construction output and specialised
construction activities. The latest observations are for the first quarter of 2026 for housing
investment, April 2026 for composite building output and June 2026 for PMI housing output
and EC composite building trend activity.
Housing investment and high-frequency
indicators
Sources: Eurostat, European Commission (EC), Eurosystem and ECB calculations.
Notes: Business investment measured as non-construction investment excluding Irish
intellectual property products (IE IPP). Projections are for modified private non-housing
investment. Intangibles confidence is the weighted average of publishing activities (NACE
J58), computer programming, consultancy and related activities (J62) and information
service activities (J63). The latest observations are for the first quarter of 2026 for
investment and June 2026 for confidence.
Business investment and high-frequency
indicators
(left-hand scale: quarter-on-quarter percentage changes;
right-hand scale: balances, percentages, diffusion index - 50)
(left-hand scale: quarter-on-quarter percentage changes and
percentage points; right-hand scale: balances, percentages)
Rubric
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70
80
90
100
110
120
130
12/24 03/25 06/25 09/25 12/25 03/26
Total Energy China AI-related goods
05/26
10
Euro area goods trade and import prices
Sources: Eurostat and ECB staff calculations.
Notes: As export and import volume data for May are not available, the latest data point is
approximated by deflating May values with industrial export and import prices respectively.
The underlying data are seasonally adjusted. The latest observations are for May 2026.
Export and import volumes of goods
Sources: Eurostat, Trade Data Monitor and ECB staff calculations.
Notes: The classification of AI-related goods is based on Emter et al.(2026), who use a
large language model following Waugh (2026) to identify: (i) core datacentre goods; (ii)
datacentre infrastructure; (iii) upstream AI goods; and (iv) broad industrial goods used in AI
production. The latest observations are for March 2026 for AI-related goods, April 2026 for
Total and Energy and May 2026 for China.
Euro area goods import prices
(3-month moving average, December 2024 = 100) (index, December 2024 = 100)
98
99
100
101
102
103
104
105
12/24 03/25 06/25 09/25 12/25 03/26
Exports Imports
05/26
Rubric
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Euro area trade and role of AI-related goods
Sources: Eurostat, Trade Data Monitor and ECB staff calculations.
Notes: Based on Emter et al.(2026), who use a large language model following Waugh
(2026) to identify: (i) core datacentre goods; (ii) datacentre infrastructure; (iii) upstream AI
goods; and (iv) broad industrial goods used in AI production. The latest observations are
for March 2026.
Share of AI-related goods in total extra
euro area trade values
Sources: Eurostat, Trade Data Monitor and ECB staff calculations.
Notes: RoW refers to rest of world excluding the euro area (EA) and United States (US).
Share in 2023 refers to the share of these imports/exports in total imports/exports of the
respective country or region. Based on Emter et al.(2026), who use a large language model
following Waugh (2026) to identify: (i) core datacentre goods; (ii) datacentre infrastructure;
(iii) upstream AI goods; and (iv) broad industrial goods used in AI production. Other AI-
related goods refers to (iii) and (iv) together. The latest observations are for 2025.
Trade in AI-related goods and
subcomponents
(percentage of total trade) (percentage of total trade; annual growth, percentage)
0
2
4
6
8
10
12
14
March 2023 March 2024 March 2025 March 2026
Exports Imports
Exports Imports Exports Imports
EA 9.6 10.9 6.7 9.9
US 12.5 12.3 11.5 34.6
RoW 14.4 14.1 19.4 16.8
EA 3.6 5.0 11.7 16.2
US 6.6 7.1 22.4 55.7
RoW 8.7 8.1 26.0 23.6
EA 4.4 4.7 4.5 5.4
US 3.7 4.1 -5.2 -0.6
RoW 3.9 4.1 6.9 5.9
EA 1.6 1.1 2.6 -1.8
US 2.2 1.1 -1.2 -2.1
RoW 1.8 2.0 8.6 8.2
Infrastructure AI goods
Other AI-related goods
Share in 2023 Growth 2024-2025
Total AI-related trade
Core AI goods
Rubric
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47
48
49
50
51
52
07/25 10/25 01/26 04/26 07/26
Composite Construction
Manufacturing Services
Sources: Eurostat and ECB staff calculations.
Notes: S16 refers to the 16 smallest euro area countries. The fall in
unemployed in Italy reflects both an increase in employment (1.1% y-o-y
in the first quarter) and a reduction in participation rates as workers
move into inactivity rather than unemployment during economic
slowdowns. The latest observations are for May 2026.
Change in the number of
unemployed
Labour market developments
Sources: Eurostat and ECB staff calculations.
Note: The latest observations are for July 2026.
PMI Employment
Source: LinkedIn.
Notes: The LinkedIn hiring rate is the number of LinkedIn members who
added a new employer to their profile in the same month the new job
began, divided by the total number of LinkedIn members in that country.
The latest available data point is for June 2026.
LinkedIn hiring rate
(year-on-year percentage changes,
percentage point contributions)
(diffusion index) (index from June 2025)
12
-5
-4
-3
-2
-1
0
1
2
3
4
5
05/25 07/25 09/25 11/25 01/26 03/26 05/26
DE FR IT ES
NL S16 Total
75
80
85
90
95
100
105
110
06/25 09/25 12/25 03/26 06/26EA DE FR IT ES NL
Rubric
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-1.5
-1.0
-0.5
0.0
0.5
1.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2023 2024 2025 26
Labour productivity growth
Labour productivity growth excl. IE
Employment growth
decomposition
Labour market developments
Sources: Eurostat and ECB staff calculations.
Note: The latest observations are for the first quarter of 2026.
Labour force growth
decomposition
Sources: Eurostat and ECB staff calculations
Note: The latest observations are for the first quarter of 2026.
Euro area labour productivity
(year-on-year percentage changes)
(year-on-year percentage changes)
13
(year-on-year percentage changes, pp contributions)
Source: Eurostat.
Notes: Employment in persons. Other contains agriculture, real estate
and entertainment. Averages are calculated using year-on-year
percentage change over the dedicated periods. The latest observations
are for the first quarter of 2026.
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2015-2022
average
2023-2024
average
2025
average
Q1 26
Information and communication technology
Professional services and financial activities
Public services
Wholesale/retail
Industry
Construction
Other
Employment
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2022 2023 2024 2025 26
Population contribution of nationals
Population contribution of non-nationals
Participation rate contribution of nationals
Participation rate contribution of non-nationals
Labour force growth rate
Rubric
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Fiscal policies
Sources: June 2026 Eurosystem macroeconomic projections and ECB staff calculations with
inputs from national central banks.
Note: Fiscal stance is calculated as the change in the cyclically adjusted primary balance
adjusted for NGEU grants. Negative (positive) numbers reflect fiscal loosening (tightening).
New measures refers only to measures announced following the cut-off date of the June 2026
Eurosystem macroeconomic projections. The orange bars reflect the annual change in the
fiscal impact of the new measures.
Euro area fiscal stance
Source: ECB staff calculations.
Notes: Measures with a direct impact on inflation (bars with solid fill) are fiscal policies that
directly influence either price levels (e.g. VAT rates) or wages (e.g. social contributions).
Measures with an indirect impact on inflation are policies that affect inflation through
indirect channels, such as demand or by supporting supply.
Main fiscal measures in the euro area
since the June projections(in percentage points of GDP)
(in percent of GDP)
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
2025 2026 2027 2028
New measures (since June 2026 projections)
Fiscal stance (June 2026 projections)
-0.04
-0.03
-0.02
-0.01
0.00
0.01
2026 2027 2028
With direct impact on inflation
With indirect impact on inflation
Total measures
Rubric
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Inflation developments and outlook
Sources: Eurostat and ECB calculations.
Note: The latest observations are for June 2026.
Headline inflation and main components
Sources: Eurostat, June 2026 Eurosystem staff macroeconomic projections, Consensus
Economics and ECB calculations.
Notes: Quantile regression forest (QRF) estimates follow Lenza et al. (2025), with 73% of
the June data available. Light (dark) shaded areas denote the QRF 5-95 (16-84) range.
Inflation fixings are not adjusted for inflation risk premia. The latest observations are for
June 2026.
Forecasts for HICP and HICPX
(annual percentage changes and percentage point
contributions)
(annual percentage changes)
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
January February March April May June
Services
NEIG
Food
Energy
HICP inflation
1.5
2.0
2.5
3.0
3.5
4.0
05/26 08/26 11/26 02/27
HICP
HICP/HICPX
QRF median (17 July 2026)
Consensus Forecast (16 July 2026)
HICP fixings excluding tobacco (20 July 2026)
June 2026 projections
03/27
1.5
2.0
2.5
3.0
3.5
4.0
05/26 08/26 11/26 02/27
HICPX
03/27
Rubric
www.ecb.europa.eu©16
Energy inflation
Sources: Eurostat, June 2026 Eurosystem staff macroeconomic projections and ECB
calculations.
Note: The latest observations are for June 2026.
Energy inflation and outlook
Sources: London Stock Exchange Group (LSEG) and ECB calculations.
Notes: Crack spreads (refining margins) show the difference between the refined product
price for petrol, diesel or jet fuel, and the Brent crude oil price. The latest observations are
for the week of 20 July 2026.
Crack spreads
(annual percentage changes and percentage point
contributions)
(EUR per barrel)
-10
0
10
20
30
40
50
60
70
80
90
100
01/26 02/26 03/26 04/26 05/26 06/26 07/26
Refined petrol
Refined diesel
Refined jet fuel
20/07/26
-6
-3
0
3
6
9
12
15
01/25 07/25 01/26 07/26 01/27
June 2026 projections
Electricity
Gas
Transportation fuels
Other
Energy
03/27
Rubric
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0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
01/26 07/26 01/27
Machine learning model mean (17 July 2026)
Short-term inflation projection (STIP) food (17 July 2026)
June 2026 projections
06/27
17
Food inflation
Sources: Eurostat, Hamburgisches WeltWirtschaftsInstitut (HWWI) and ECB calculations.
Notes: The drivers explaining deviations in euro area food inflation from its long-term
average follow the BVAR model from Ferrucci et al. (2012). The latest observations are for
June 2026.
Drivers of euro area consumer
food price inflation
Food inflation outlook
(percentage point deviations and contributions)
(annual percentage changes)
Sources: Eurostat, June 2026 Eurosystem macroeconomics projections, Hamburgisches
WeltWirtschaftsInstitut (HWWI) and ECB calculations.
Notes: The machine learning (ML) model, from Kuik et al.2026 (forthcoming) averages
predictions from a linear model and several non-linear tree-based models: Ridge; Random
Forest (RF); Quantile Regression Forest (QRF); and Light Gradient-Boosting Machine
(LightGBM) and Extreme Gradient Boosting (XGBoost). The latest observations are for
June 2026.
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
01/25 07/25 01/26 06/26
Deviation of food inflation from its long-term average
Energy producer prices
Global food commodity prices
Euro area farm gate prices
Euro area producer prices for the food industry
Unexplained
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0
1
2
3
4
01/26 04/26 07/26 10/26 01/27
Services
Short-term inflation projection (STIP) services (17 July 2026)
June 2026 projections
QRF median (17 July 2026)
03/27
0
1
2
3
4
01/26 04/26 07/26 10/26 01/27
NEIG
June 2026 projections
QRF median (17 July 2026)
03/27
18
Goods and services inflation
Sources: Eurostat, June 2026 Eurosystem staff macroeconomic projections and ECB
calculations.
Notes: Quantile regression forest (QRF) estimates follow Lenza et al. (2025), with 73% of
the June data available. The latest observations are for June 2026.
Non-energy industrial goods (NEIG)
inflation
Sources: Eurostat, June 2026 Eurosystem staff macroeconomic projections and ECB
calculations.
Notes: Quantile regression forest (QRF) estimates follow Lenza et al. (2025), with 73% of the
June data available. STIP services employs a BVAR with HICP services, employment,
compensation per employee (CPE), negotiated wages, PMI input prices in services, PMI
employment, and PPI energy, from Durero et al. (forthcoming). Forecasts conditioned on ECB
staff assumptions for CPE and employment and on a PPI energy path from an auxiliary model
using oil and gas futures. The latest observations are for June 2026.
Services inflation
(annual percentage changes)
(annual percentage changes)
Rubric
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1.5
2.0
2.5
3.0
3.5
01/26 04/26
HICPX
HICPXX
HICP excluding unprocessed food and energy
HICP excluding energy
Trimmed mean (10%)
Trimmed mean (30%)
Domestic inflation
06/26
Exclusion-based measures
1.5
2.0
2.5
3.0
3.5
01/26 04/26
Supercore
PCCI
PCCI excluding energy
PCCI services
ICARIS
06/26
Model-based measures
19
Underlying inflation
Sources: Eurostat and ECB calculations.
Notes: HICPX stands for HICP excluding energy and food. HICPXX stands for HICP
excluding energy, food, travel-related services, clothing and footwear. PCCI is the
persistent and common component of inflation. ICARIS follows Le Bihan et al. (2024) and
stands for indicator of core by aggregating regimes of inflation sub-components. Domestic
inflation comprises HICPX items with a low import content (less than 12%), and Supercore
those with a high co-movement with the business cycle. The latest observations are for
June 2026.
Measures of underlying inflation
Sources: Eurostat and ECB calculations.
Notes: Results are based on the BVAR with energy price shocks from Bańbura et al. (2023). Left
panel: the adjusted measures abstract from energy and supply-bottleneck shocks. The range of
the adjusted measures does not include trimmed means and PCCI services. Right panel:
cumulated impulse responses of underlying inflation indicators to an energy price shock
(calibrated to increase by 10% the month-on-month growth rate of the synthetic energy price),
after 6, 12 and 24 months (the “total” effect). The latest observations are for June 2026.
Adjusted underlying inflation measures and
pass-through of energy shock(annual percentage changes)
(left panel: annual percentage changes; right panel: percentages)
1.8
2.1
2.4
2.7
3.0
01/26 04/26
Underlying inflation measures
Adjusted measures
HICPX
HICPX adjusted
06/26 0% 50% 100%
Domestic
HICPXX
HICP excl. energy
and proc. food
Supercore
HICPX
HICP excl. energy
PCCI
HICP
After 6 months
After 12 months
After 24 months
Rubric
www.ecb.europa.eu©
-1.0
0.0
1.0
2.0
3.0
4.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2025 2026
Unit labour costs
Unit taxes
Unit profits
GDP deflator
Total supply deflator
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
01/25 04/25 07/25 10/25 01/26 04/26
Total economy
Industry
Services
06/26
20
Domestic price pressures
Sources: Eurostat, June 2026 projections and ECB calculations.
Notes: The GDP deflator is calculated as the ratio of nominal and real GDP. The total
supply deflator is broader than the GDP deflator as it also accounts for the role of import
costs. The latest observations are for the first quarter of 2026.
Euro area GDP deflator excluding volatile
Irish data
Source: S&P Global.
Notes: The indicators for the implied PMI profit margins are constructed as the gap
between PMI output and input prices. The latest observations are for June 2026.
PMI profit margins
(annual percentage changes, percentage point contributions)
(z-scores, in standard deviations)
Rubric
www.ecb.europa.eu©
1.5
2.0
2.5
3.0
3.5
4.0
07/25 10/25 01/26 04/26 07/26 10/26 01/27
ECB wage tracker
ECB wage tracker excluding one-offs
03/27
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2026 2027 2028
June 2026 projections SPF Q3 2026
Consensus July 2026 CTS July 2026
SAFE Q2 2026
21
Wage developments
Source: ECB wage tracker.
Note: The latest observations are for March 2027.
ECB wage tracker
Sources: Survey of Professional Forecasters (SPF), June 2026 Eurosystem staff
macroeconomic projections, Consensus Economics, Corporate Telephone Survey (CTS)
and the survey on the access to finance of enterprises (SAFE).
Notes: The SAFE asks about 12-month-ahead wage growth, while all the other surveys are
for calendar years. SAFE wage expectations for 2026 (blue stripped bar) are taken from
the survey wave for the first quarter of 2026. The latest observations are for the second
quarter for SAFE, the third quarter for SPF and July 2026 for CTS.
Survey-based wage expectations
(annual percentage changes) (annual percentage changes)
Rubric
www.ecb.europa.eu©
1.6
1.9
2.2
2.5
2.8
3.1
3.4
09/26 09/27 09/28 09/29 09/30
SMA March 2026 SMA April 2026
SMA June 2026 SMA July 2026
SPF April 2026 SPF July 2026
Long term1 year
ahead
3 years
ahead
5 years
ahead
December 2025
March 2026
June 2026
SAFE
1.6
2.0
2.4
2.8
3.2
3.6
4.0
4.4
1 year
ahead
3 years
ahead
5 years
ahead
February 2026
March 2026
April 2026
May 2026
June 2026
CES
Sources: ECB Consumer Expectations Survey (CES) and survey on the
access to finance of enterprises (SAFE).
Notes: For CES and SAFE median inflation expectations by survey
wave. The latest observations are for June 2026 CES and SAFE waves.
CES and SAFE inflation
expectations
Inflation expectations
Sources: Survey of Professional Forecasters (SPF), Survey of Monetary
Analysts (SMA) and ECB calculations.
Notes: Mean inflation expectations for SPF and the median for SMA.
SPF long term is either four (2030) or five (2031) years ahead depending
on the time of the survey. The latest observations are for the third
quarter of 2026 SPF wave (conducted in July 2026) and June 2026 for
SMA.
SPF and SMA inflation
expectations
Decomposition of euro area
inflation-linked swap rates
(annual percentage changes) (annual perce ntage changes) (percentages per annum)
22
Sources: Bloomberg and ECB calculations.
Notes: Market-based ILS rates reflect both investors' genuine inflation
expectations and an inflation risk premium. The premia-adjusted
("expectations") series strips out this risk premium to provide expected
inflation by markets. Premia-adjusted forward ILS rates are average estimates
from two affine term structure models (see Joslin, Singleton and Zhu (2011)
and Burban et al. (2022). The latest observations are for 23 July 2026
(monthly data).
Rubric
www.ecb.europa.eu©
-4
0
4
8
12
16
20
24
28
32
Start of the
year
June GovC Start of the
year
June GovC
Real rate component Term premium component
Inflation component Expectation component
10-year OIS
Changes since
23
€STR forward curve and long-term risk-free rates
Sources: LSEG (London Stock Exchange Group), SMA (Survey of Monetary Analysts), Morningstar
and ECB calculations. Notes: Bars show the median deposit facility rate expectations from the ECB's
July Survey of Monetary Analysts, adjusted for the latest €STR-DFR spread. Chart shows 15th-85th
percentile option-implied (risk-neutral) densities for Jun-26 to Mar-28 3-month Euribor futures
contracts, adjusted for the spread of the horizon-matching €STR 3-month forward rates. See right
hand-side note for the estimation of term premia component. The range for the (nominal) neutral rate
i* is based on Eurosystem estimates from the July 2026 MPB. “Pre-June GovC” refers to 10 June
2026 while “post-Iran/US MoU” refers to 15 June 2026. The latest observations are for 23 July 2026.
€STR forward curve and survey
expectations of the deposit facility rate
Sources: Bloomberg, LSEG (London Stock Exchange Group) and ECB calculations.
Notes: The real rate is calculated by subtracting the inflation-linked swap rate from the
nominal OIS rate. Estimates of term premia and expectations components are based on
two affine term structure models (both variations of Joslin, Singleton and Zhu (2011), and a
lower bound term structure model following Geiger and Schupp (2018). “Start of the year”
refers to 2 January 2026 while “June GovC” refers to 10 June 2026. The latest
observations are for 23 July 2026.
Decomposition of changes in
10-year euro area OIS rates
(percentages per annum) (basis points)
1.5
2.0
2.5
3.0
3.5
4.0
01/26 07/26 01/27 07/27
Range of ESCB measures of i*
Realised €STR
€STR forward curve (pre-June GovC)
€STR forward curve (post-Iran/US MoU)
€STR forward curve (latest)
€STR forward curve adjusted for term premia (latest)
Option-based 15th and 85th percentiles
SMA median (July 2026)
Rubric
www.ecb.europa.eu©24
Financial and broad intermediation conditions
Sources: Bletzinger et al. (2026) and ECB calculations.
Notes: “Short rate” refers to the €STR, “Long rate” to the 10y OIS rate, “Real rates” to the
1y1y and 5y real OIS rates, “Sovereign spreads” to 2y and 10y euro area GDP-weighted
sovereign bond yields over OIS rates, “Risk assets” to euro area investment-grade corporate
bond spreads and the cyclically adjusted P/E-ratio (CAPE) and “Euro FX” to euro NEER (see
Bletzinger, Martorana and Mistak, 2026). Changes refer to 2 January 2026 (“Start of the
year”) and 10 June 2026 (“June GovC”). The latest observations are for 23 July 2026.
Decomposition of the Macro-Finance
Financial Conditions Index (FCI)
Sources: ECB and Allayioti, Di Casola and Magistretti (forthcoming).
Notes: The ECB-BIG index uses a BVAR model with mixed-frequency to derive a measure
of credit conditions in the euro area. “Price components” include lending rates and Macro-
Finance FCI; “Quantity components” include credit volumes and bank lending survey (BLS)
data. Changes since the June GovC refer to the change between the current nowcast of
the index for July and the nowcast for June as of the June GovC. The latest observations
are for July 2026.
The Broad Intermediation Gauge
(ECB-BIG) index
-0.04
-0.02
0.00
0.02
0.04
0.06
0.08
Start of the year June GovC
Changes since
ECB-BIG Price components Quantity components
LooserTighter
(index – higher means tighter financial conditions) (index – higher means tighter intermediation conditions)
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
Start of the year June GovC
Sovereign spreads Euro FX Risk assets
Short rate Long rate Real rates
Macro-Finance FCI
Changes since
Tighter Looser
Rubric
www.ecb.europa.eu©
Sources of money creation
Monetary aggregates, bank funding costs and lending rates
Changes in bank funding costs Changes in firm and household
costs of financing(left-hand scale: monthly flows in EUR billions;
right-hand scale: annual percentage changes)
(basis points)
(basis points)
25
Sources: ECB (BSI (Balance Sheet Items)) and ECB calculations.
Note: The latest observations are for May 2026.
Sources: ECB (BSI (Balance Sheet Items), MIR (Monetary Financial
Institutions Interest Rates), CSDB (Centralised Securities Database),
MMSR (Money Market Statistical Reporting Database)), IHS Markit iBoxx
and ECB calculations. Notes: Composite funding costs are computed by
weighing rates on new business costs of each component by outstanding
amounts. The latest observations are for May 2026 for monthly data and
23 July for daily rates data.
Sources: ECB (MIR (Monetary Financial Institutions Interest Rates)),
Bank of America Merrill Lynch and ECB calculations
Notes: Composite bank lending rates are calculated by aggregating short
and long-term rates using a 24-month moving average of new business
volumes. For firms, the indicator also includes rates on overdrafts. The
latest observations are for May 2026 (MIR) and 23 July 2026 for the cost
of market-based debt.
-3
-2
-1
0
1
2
3
4
-150
-100
-50
0
50
100
150
200
01/26 02/26 03/26 04/26 05/26
Other counterparts
Decline in central government deposits
Bank long-term liabilities (-)
Bank credit to general government
Eurosystem net purchases
Net external monetary flows
Loans to firms and households
M3 flow
M3 annual growth rate (right-hand side)
0
10
20
30
40
50
60
Changes
Composite bank lending rates
Loans up to 1 year
Loans over 1 year and up to 5 years
Loans over 5 years
Cost of market based debt
Firms
Changes
Household mortgages
Changes from December 2025
-10
0
10
20
30
40
50
60
Changes from December 2025
Composite funding costs
Overnight deposits
Redeemable at notice dep.
Time deposits
Interbank rate
Bank bond yields
Rubric
www.ecb.europa.eu©
-5
0
5
10
15
20
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2025 2026
Banks' risk tolerance
Risk perceptions
Competition
Cost of funds and balance sheet constraints
Other factors
Credit standards - actual
Credit standards - expected
-20
-10
0
10
20
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2025 2026
Use of alternative finance
Other financing needs
General level of interest rates
Inventories and working capital
Fixed investment
Other factors
Demand - actual
Demand - expected
Sources: ECB (BSI (Balance Sheet Items)), CSEC (Centralised
Securities Database) and ECB calculations.
Notes: The seasonal adjustment for debt securities is not official. Bank
loans are adjusted for sales, securitisation and cash pooling. The latest
observations are for May 2026.
Credit to firms in the euro area
Loans to firms
Source: ECB (Bank Lending Survey).
Notes: "Other factors” refers to further factors which were mentioned by
banks as having contributed to changes in credit standards. The latest
observations are for the second quarter of 2026 (past) and the third
quarter of 2026 (expected).
Changes in credit standards for
loans to firms
Source: ECB (Bank Lending Survey)
Notes: “Other financing needs”: average of “M&A and corp. restructuring”
and “debt refinancing/restructuring and renegotiation”. “Use of alternative
finance”: average of components that refer to internal financing, loans
from other banks and from non-banks, debt securities and equity
issuance/redemption. The latest observations are for the second quarter
of 2026 (past) and the third quarter of 2026 (expected).
Changes in demand for loans to
firms(left-hand scale: average monthly flows in EUR
billions; right-hand scale: annual percentage)
changes)
(net percentages of banks reporting a tightening) (net percentages of banks reporting an increase)
26
-2
-1
0
1
2
3
4
5
6
7
-10
-5
0
5
10
15
20
25
30
35
01/26 02/26 03/26 04/26 05/26
Borrowing from banks
Net issuance of debt securities
Annual growth rate (right-hand scale)
Rubric
www.ecb.europa.eu©
-15
-10
-5
0
5
10
15
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2025 2026
Banks' risk tolerance
Risk perceptions
Competition
Cost of funds and balance sheet constraints
Other factors
Credit standards - actual
Credit standards - expected
-60
-40
-20
0
20
40
60
80
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2025 2026
Use of alternative finance
Other financing needs
General level of interest rates
Consumer confidence
Housing market prospects
Other factors
Demand - actual
Demand - expected
Sources: ECB (BSI (Balance Sheet Items)) and ECB calculations.
Notes: Bank loans adjusted for sales and securitisation and seasonally
adjusted. The latest observations are for May 2026.
Loans to households in the euro
area
Loans to households
Source: ECB (Bank Lending Survey).
Notes: "Other factors” refers to further factors which were mentioned by
banks as having contributed to changes in credit standards. The latest
observations are for the second quarter of 2026 (past) and third quarter
of 2026 (expected).
Changes in credit standards for
housing loans
Source: ECB (Bank Lending Survey).
Notes: “Other financing needs”: average of “regulatory and fiscal regime
of housing markets” and “debt refinancing/restructuring and
renegotiation”. “Use of alternative finance”: average of “internal
financing”, “loans from other banks” and “other sources of external
finance”. The latest observations are for the second quarter of 2026
(past) and the third quarter of 2026 (expected).
Changes in demand for housing
loans
(left-hand scale: average monthly flows in EUR
billions; right-hand scale: annual percentage
changes)
(net percentages of banks reporting a tightening) (net percentages of banks reporting an increase)
27
-1
0
1
2
3
4
-5
0
5
10
15
20
01/26 02/26 03/26 04/26 05/26
Other lending
Credit for consumption
Loans for house purchase
Annual growth rate (right-hand scale)
Rubric
www.ecb.europa.eu©28
Survey of Monetary Analysts (SMA) – DFR expectations and balance of risk
Source: SMA.
Notes: Total response counts across all projection horizons are as follows: 70 respondents
for deposit facility rate (DFR) expectations at the GovC meetings (07/26, 09/26, 12/26,
06/27) and for DFR expectations at quarterly frequency (Q4 2027, Q4 2028); 67
respondents for the long-term DFR outlook. Percentages may not add up to 100%.
Expected Deposit Facility Rate level
at Governing Council meetings
Source: SMA.
Note: Percentages may not add up to 100 due to rounding.
Balance of risk surrounding the euro area
inflation and growth outlook
(percentage of respondents) (percentage of respondents)