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Outlook for the
euro area economy
Richard Cantillon Lecture, 49th Annual
DEW Economic Policy Conference
Philip R. Lane
Member of the Executive BoardWexford, 11 September 2026 0
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Source: ECB staff calculations.
Note: The cut-off date for technical assumptions and international projections was 26 November 2025 in the December 2025 Eurosystem staff projections and 19 August 2026 in the
September 2026 ECB staff projections.
Projection comparison –
September 2026 projections vs December 2025 projections
(annual percentage changes, revisions in percentage points) 1
Global outlook
2025 2026 2027 2028 2025 2026 2027 2028
World excl. EA GDP 3.7 3.1 3.3 3.4 0.2 -0.2 0.0 0.1
World excl. EA real import growth 5.4 4.7 4.5 3.5 1.0 2.7 1.4 0.4
Euro area foreign demand 4.6 3.6 4.0 3.4 0.8 1.7 0.9 0.4
Euro area competitor export prices 1.3 7.0 3.0 1.7 0.2 5.4 1.0 -0.3
Q4 25 Q4 26 Q4 27 Q4 28 Q4 25 Q4 26 Q4 27 Q4 28
World excl. EA GDP 3.6 2.7 3.5 3.3 0.6 -0.9 0.3 0.0
World excl. EA real import growth 4.5 5.3 4.0 3.4 1.6 2.4 0.9 0.3
Euro area foreign demand 3.3 4.4 3.7 3.3 1.2 1.4 0.7 0.3
Euro area competitor export prices 0.9 8.5 1.5 1.9 0.6 6.2 -0.4 -0.1
September 2026 projections vs December 2025 projections
(annual percentage changes) (percentage point changes)
(Q4-on-Q4 percentage changes) (percentage point changes)
September 2026 projections vs December 2025 projections
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Sources: Refinitiv and ECB staff calculations.
Notes: Projections also entail spot prices. Cut-off for the September
2026 baseline is 19 August 2026. September scenarios are based on
percentiles as of 19 August 2026 and June scenarios on percentiles as
of 21 May 2026. The latest future curve is also averaged over ten
business days. 'MA' refers to moving average. The latest observations
are for 7 September 2026.
Oil prices
Outlook and scenarios for energy commodity prices
Sources: Refinitiv and ECB staff calculations.
Notes: Projections also entail spot prices. Cut-off for the September
2026 baseline is 19 August 2026. September scenarios are based on
percentiles as of 19 August 2026 and June scenarios on percentiles as
of 21 May 2026. The latest future curve is also averaged over ten
business days. 'MA' refers to moving average. The latest observations
are for 7 September 2026.
Gas prices
Sources: Refinitiv and ECB staff calculations.
Notes: SECPI is computed as a weighted average of oil and gas prices.
Projections also entail spot prices. Cut-off for the September 2026
baseline is 19 August 2026. September scenarios are based on
percentiles as of 19 August 2026 and June scenarios on percentiles as
of 21 May 2026. The latest future curve is also averaged over ten
business days. 'MA' refers to moving average. The latest observations
are for 7 September 2026.
Synthetic energy commodity
price index (SECPI) (USD per barrel) (EUR/MWh)
(USD index) 2 60 70 80 90 100 110 120 130 140 150 160 170
2026 2027 2028
June 2026 baseline
September 2026 baseline
June adverse scenario
June severe scenario
June milder scenario
September adverse scenario
September severe scenario
September milder scenario
Latest future curve, 10 days MA - cut-off 7 Sep 20 30 40 50 60 70 80 90 100 110 120 130
2026 2027 2028
June 2026 baseline
September 2026 baseline
June adverse scenario
June severe scenario
June milder scenario
September adverse scenario
September severe scenario
September milder scenario
Latest future curve, 10 days MA - cut-off 7 Sep 30 40 50 60 70 80 90 100 110
2026 2027 2028
June 2026 baseline
September 2026 baseline
June adverse scenario
June severe scenario
June milder scenario
September severe scenario
September adverse scenario
September milder scenario
Latest future curve, 10 days MA - cut-off 7 Sep
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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 ten-day rolling averages. Cut-off for the September
projections is 19 August 2026. The latest observations are for 7 September 2026.
USD/EUR and NEER
Sources: London Stock Exchange Group (LSEG), Hamburgisches WeltWirtschaftsInstitut
(HWWI) and ECB calculations.
Note: The latest observations are for 4 September 2026 (weekly data).
Non-energy commodities
(left-hand scale: level; right-hand scale: index: 1999 = 100) (index: 2020 = 100) 120 130 140 150 160 170 180 190 200 210 220
01/25 06/25 11/25 04/26 09/26
Metals Food
04/09/26
201.33
1.0
1.1
1.2
1.3
01/25 06/25 11/25 04/26 09/26
USD/EUR NEER 17 (right-hand side)
1.16
100.28
September projections:
100.26
1.16 (USD/EUR)
(NEER)
07/09/26
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Sources: Haver and ECB staff calculations.
Notes: The latest observations are for the second quarter of 2026. The
second quarter bar combines National Accounts (NA) releases (83% of
global GDP) with projections for countries which did not release NA data.
World (excl. euro area)
real GDP growth
Sources: Haver and ECB staff calculations.
Notes: The latest observations are for the second quarter of 2026. The
second quarter bar combines National Accounts (NA) releases (71% of
global imports) with projections for countries which did not release NA
data.
World (excl. euro area)
import growth
Source: ECB staff calculations.
Note: Revisions relative to the June 2026 projections.
Revisions to euro area
foreign demand
(quarter-on-quarter percentage changes) (quarter-on-quarter percentage changes) (percentage points) 4
Global growth, imports and euro area foreign demand
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Q1 Q2 Q3 Q4 Q1 Q2
2025 2026
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2026 2027 2028
0.0
0.5
1.0
1.5
2.0
2.5
Q1 Q2 Q3 Q4 Q1 Q2
2025 2026
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Developments in export prices of euro area competitors
Source: ECB staff calculations.
Notes: The second quarter bar combines national accounts releases with projections for
countries that did not release these data. “AI exporters” refers to AI hardware exporters,
including, e.g., Taiwan and South Korea. “ARDL forecast” is the outcome of 28 countries’
autoregressive distributed lag models incorporating commodity prices (energy and non-
energy), PPI (producer price index), NEER (nominal effective exchange rate) and tariffs.
Euro area competitors’ export prices
Sources: S&P Global and ECB staff calculations.
Notes: Data for the second quarter of 2026. Based on countries with largest upside
surprises to export prices in the first and second quarters of 2026 (United States, China,
South Korea, Japan, Taiwan). Country-level numbers based on unweighted z-scores
across categories. “Weighted average” obtained with country’s weights in euro area
competitors’ export prices.
Export prices of selected euro area competitors
AI-related Energy-intensive Other
Min-max range Weighted average
(z-scores based on annual percentage changes)(left panel: annual percentage changes;
right panel: percentage points) 0 2 4 6 8 10
Q4 Q1 Q2 Q3 Q4
2025 2026
Outcome
September 2026 projections
June 2026 projections
ARDL forecast
Q2 partial
outturn vs
June
projections
JP
Other
AI exporters
CN
IN
US
Total
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Notes: Revisions are expressed as percentages for levels and percentage points for interest rates and bond yields. The techni cal assumptions about euro area interest rates, equities
and commodity prices are based on market expectations, with a cut -off date of 19 August 2026. The paths of commodity prices are implied by futures markets in the ten working days
ending on the cut-off date. The use of electricity price assumptions in the staff projections differs according to cross -country differences in price setting practices for consumer
electricity prices. ETS stands for emissions trading system.
September 2026 ECB staff macroeconomic projections:
technical assumptions 6
September 2026 ECB staff projections: baseline assumptions
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Note: Revisions are calculated based on rounded figures.
September 2026 ECB staff macroeconomic projections:
key macroeconomic variables 7
September 2026 ECB staff projections: baseline projections
Revisions vs June 2026 projectionsSeptember 2026 projections
(percentage points)(annual percentage points) 20282027202620252028202720262025
0.10.20.00.02.12.53.02.1HICP
0.1-0.1-0.20.02.32.62.32.5HICP excluding energy
0.10.10.00.02.32.62.52.4HICP excluding energy and food
-0.52.30.90.0-0.61.09.3-1.4HICP energy
0.1-0.7-0.70.02.52.81.92.8HICP food
0.10.10.1-0.13.33.33.33.8Compensation per employee
0.10.00.00.12.32.42.83.2Unit labour costs
0.00.20.1-0.21.51.40.91.3Real GDP
-0.10.10.30.01.41.21.21.1Real GDP with modified domestic demand
for Ireland
-0.10.00.20.01.31.01.01.5Private consumption
0.00.10.3-0.11.31.11.91.5Government consumption
-0.10.30.0-0.22.02.01.82.9Total investment
0.00.61.0-0.12.93.22.12.0Exports
-0.1-0.1-0.10.05.96.16.26.3Unemployment rate (% of labour force)
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Note: Revisions are calculated based on rounded figures.
September 2026 ECB staff macroeconomic projections:
key macroeconomic variables 8
September 2026 ECB staff projections: baseline projections
Revisions vs June 2026 projectionsSeptember 2026 projections
(percentage points)(Q4-on-Q4 percentage points)
Q4 2028Q4 2027Q4 2026Q4 2025Q4 2028Q4 2027Q4 2026Q4 2025
0.10.00.20.02.21.93.62.1HICP
0.10.0-0.20.02.32.52.52.4HICP excluding energy
0.10.10.00.02.32.42.62.4HICP excluding energy and food
-0.4-0.74.20.00.8-4.114.9-1.1HICP energy
0.1-0.1-1.40.02.33.11.92.5HICP food
0.10.20.0-0.23.33.43.03.6Compensation per employee
0.10.2-0.10.12.32.52.33.3Unit labour costs
0.00.00.3-0.11.51.41.21.1Real GDP
-0.1-0.10.60.01.41.31.21.2Real GDP with modified domestic demand
for Ireland
-0.1-0.10.2-0.11.31.20.71.2Private consumption
0.0-0.20.4-0.11.41.01.41.6Government consumption
-0.5-0.81.2-0.31.70.93.02.9Total investment
0.1-0.31.10.22.92.63.32.2Exports
-0.10.0-0.10.05.86.16.26.3Unemployment rate (% of labour force)
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Short-term growth outlook
Sources: Eurostat, September 2026 ECB staff macroeconomic projections, ECB and ECB
calculations.
Notes: “MDD” stands for “modified domestic demand”. The latest observations are the
second quarter of 2026 for GDP.
GDP estimates
(quarter-on-quarter percentage changes)
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Q2 Q3 Q4
GDP (Eurostat)
GDP (Euro area with Irish MDD)
September 2026 projections
September 2026 projections with Irish MDD 2026
Sources: Eurostat and ECB calculations.
Notes: The expenditure breakdown excludes Ireland. The latest observation is for the
second quarter of 2026 for GDP.
GDP growth and components
(quarter-on-quarter percentage changes and percentage points)
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Q3 Q4 Q1 Q2
Private consumption Government consumption
Investment Inventories
Net exports GDP
GDP (excl. IE) 20262025
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Survey indicators
Sources: EC (European Commission) and S&P Global.
Notes: The production expectations and uncertainty measures are weighted averages for
industry, services and retail. The latest observations are for August 2026.
Surveys
Sources: S&P Global and ECB calculations.
Notes: Sectoral labels are taken from the July Global PMI press release. The latest
observations are for August 2026.
Sectoral PMIs
(left panel: diffusion indices;
right panel: percentage balances)
(difference in July and August versus second quarter)
-10 -8 -6 -4 -2 0 2 4 6 8 10 12
Technology equipment
Minerals and mining
Machinery and equipment
Beverages and food
Automobiles and auto parts
Chemicals
Media
Household/personal use
Tourism and recreation
Banks
Transportation
Real estate
Software and services
Industrial services
Output/activity New orders
Manufacturing
Construction
Services 46 48 50 52 54 56 58 60 62
02/26 05/26 08/26
PMI output
PMI new orders
PMI future activity 29 30 31 32 33 34 35 363 4 5 6 7 8 9 10
02/26 05/26 08/26
EC production expectations
EC uncertainty (right-hand
scale, inverted)
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Private consumption
Sources: Eurostat, EC (European Commission) and September 2026 ECB staff macroeconomic
projections.
Notes: Goods and services refer to the spending of domestic and foreign households in the euro
area. Confidence and (three months ahead) expected activity (i.e. expected production for
manufacturing, employment for construction, business for retail trade and demand for services
applying FIGARO 2023 weights of sectoral shares) refer to fitted values of regressions of
consumption. The latest observations are for the second quarter of 2026 for consumption and
August 2026 for confidence and expected activity.
Private consumption and
short-term indicators
Sources: Eurostat, September 2026 ECB staff macroeconomic projections and ECB staff
calculations.
Note: The latest observations are for the first quarter of 2026 for savings and income, and
the second quarter of 2026 for private consumption and deflator.
Private consumption – projection
-4
-3
-2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Private consumption deflator (negative)
Savings (negative)
Non-labour income
Labour income
Private consumption
2025 2026
(quarter-on-quarter percentage changes and percentage points)
(year-on-year percentage changes and percentage points)
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
Q1 Q2 Q3 Q4 2026
Services
Goods
Private consumption
September 2026 projections
EC consumer confidence
EC consumer expected activity 2026
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-12
-9
-6
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
Q1 Q2 Q3 Q4
Housing investment
Composite building construction output
EC composite building trend activity (right-hand scale)
PMI housing output - 50 (right-hand scale) 202612
Housing and business investment
Sources: Eurostat, EC (European Commission), S&P Global and ECB calculations.
Note: The latest observations are for the second quarter of 2026 for housing investment,
June 2026 for composite building output and August 2026 for PMI indicators and the
European Commission composite building trend activity.
Housing investment and
short-term indicators
Sources: Eurostat, EC (European Commission) and ECB calculations.
Notes: Business investment is proxied with total investment excluding construction and
Irish intangibles. Intangible confidence is the weighted average of the following subgroups:
publishing activities (J58); computer programming and consultancy (J62); and information
activities (J63). Capital goods confidence is a proxy for tangibles. The latest observations
are for the second quarter of 2026 for investment and August 2026 for EC confidence.
Business investment and
short-term indicators
(left-hand scale: quarter-on-quarter percentage changes;
right-hand scale: balances and PMI diffusion index - 50)
-10
-1.0
-0.5
0.0
0.5
1.0
Q1 Q2 Q3 Q4
Business investment
Contribution from intangibles
Contribution from tangibles
EC confidence capital goods (right-hand scale)
EC confidence intangibles (right-hand scale) 2026
(left-hand scale: quarter-on-quarter percentage changes and
percentage points;
right-hand scale: percentage balances)
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Sources: Eurostat and ECB staff calculations.
Notes: As export and import volume data for June are not available, the
latest data point is approximated by deflating June values with industrial
export and import prices, respectively. The latest observations are for
June 2026.
Exports and imports of goods 97 98 99 100 101 102 103 104
01/25 04/25 07/25 10/25 01/26 04/26
Exports Imports
06/26
Euro area exports
Source: September 2026 ECB staff macroeconomic projections.
Notes: Goods and services. The latest observations are for the second
quarter of 2026.
Euro area exports and foreign
demand 95 100 105 110 115 120 125
2023 2024 2025 2026 2027 2028
Exports Foreign demand
Sources: Trade Data Monitor, Eurostat and ECB staff calculations.
Notes: Export market shares are the ratio of extra -euro area export
volumes and euro area foreign demand. The latest observations are for
the first quarter of 2026.
Extra-euro area market shares
(index, January 2025 = 100)
(index, Q1 2023 = 100)
(index, Q1 2023 = 100) 13 65 70 75 80 85 90 95 100
2023 2024 2025 2026
Total AI-related
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Sources: Eurostat and ECB staff calculations.
Note: The latest observations are for July 2026.
Unemployment rate 0 5 10 15 20 25 30
EA DE FR IT ES NL
Range between 2000 - 2026 July 2025 July 2026
Labour market developments
Source: S&P Global.
Note: The latest observations are for August 2026.
PMI employment 47 48 49 50 51 52
08/25 11/25 02/26 05/26 08/26
Composite Construction
Manufacturing Services
Sources: NL Analytics and ECB staff calculations.
Notes: Indicators constructed by counting the share of sentences
appearing in earnings calls of euro area firms containing one of several
keywords synonymous with “hiring” (i.e. “recruiting”, “new hires”, “new
staff”) and “firing” (“layoffs”, “downsizing”, “restructuring”). Dashed lines
represent the averages since the first quarter of 2019 for each index.
The latest observations are for June 2026.
Indicators of hiring and firing in
earnings calls 85 90 95 100 105 110 115 120
Q2 25 Q3 25 Q4 25 Q1 26 Q2 26
Hire
Hire: 2019 - 2026 average
Fire
Fire: 2019 - 2026 average(percentages) (diffusion index)
(index: Q2 2025 = 100) 14
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Sources: September 2026 ECB staff macroeconomic projections and June 2026 Eurosystem staff macroeconomic projections.
Notes: The fiscal policy stance is measured as the change in the cyclically adjusted primary balance. The figures shown are also adj usted for the fact that revenues from grants under
the Next Generation EU (NGEU) programme are not withdrawn from the domestic economy. A negative (positive) figure implies a l oosening (tightening) of the fiscal stance.
Euro area fiscal projections 15
Outlook for fiscal policy
Revisions since
June 2026 projectionsSeptember 2026 projections
(percentage points)(percentage of GDP) 20282027202620252028202720262025
0.00.00.0-0.1-3.6-3.7-3.6-3.0Budget balance
-0.2-0.2-0.1-0.246.546.646.846.6Total revenues
-0.2-0.2-0.1-0.150.250.350.449.7Total expenditures
0.00.00.00.02.42.32.11.9Interest expenditure
0.00.00.0-0.1-1.2-1.4-1.5-1.1Primary balance
0.20.20.20.10.30.20.20.1Cyclical component
-0.2-0.2-0.2-0.2-1.5-1.6-1.7-1.3Cyclically adjusted primary balance
-0.6-0.5-0.4-0.389.488.888.287.1Gross debt
0.0-0.1-0.10.0-0.8-1.1-0.8-1.3Interest rate-growth differential
0.00.00.0-0.10.10.20.41.1Deficit-debt adjustment
0.00.00.0-0.10.20.4-0.50.0Fiscal stance (adjusted for NextGenerationEU)
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Outlook for government consumption and investment
Source: September 2026 ECB staff macroeconomic projection.
Note: The latest observations are for 2025.
Real government consumption
Source: September 2026 ECB staff macroeconomic projections.
Note: The latest observations are for 2025.
Real government investment
(annual percentage changes) (annual percentage changes)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2024 2025 2026 2027 2028 0 1 2 3 4 5 6 7 8 9
2024 2025 2026 2027 2028
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Recent inflation developments and short-term outlook
Sources: Eurostat and ECB calculations.
Note: The latest observations are for August 2026 (flash).
Headline inflation and main components
Sources: Eurostat, Eurosystem staff macroeconomic projections for the euro area, June
2026 and ECB staff macroeconomic projections for the euro area, September 2026, and
ECB calculations.
Notes: Quantile regression forest (QRF) estimated on 8 September 2026 with 69.5% of
August data available, Lenza et al. (2025). Light (dark) shaded areas denote the QRF 5 -95
(16-84) range. Cut-off for fixings excluding tobacco is 7 September 2026. The latest
observations are for August 2026 (flash).
Short-term forecasts for HICP and HICPX
(annual percentage changes and percentage point contributions) (annual percentage changes)
2.0
2.5
3.0
3.5
4.0
4.5
07/26 11/26 03/27
HICP
HICP/HICPX
QRF median (quantile regression forest)
Consensus forecast (13 August 2026)
HICP fixings excluding tobacco
September 2026 projections
June 2026 projections
06/27
2.0
2.5
3.0
3.5
4.0
4.5
07/26 11/26 03/27
HICPX
06/27
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
March April May June July August
Services
Non-energy industrial goods
Food
Energy
HICP inflation
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Energy inflation
Sources: Eurostat, ECB staff macroeconomic projections for the euro area, September
2026, and ECB calculations.
Note: The latest observations are for August 2026 (flash) for energy inflation and July 2026
for the components of energy inflation.
Energy inflation and short-term outlook
-6
01/25 06/25 11/25 04/26 09/26 02/27
Other Transport fuels
Gas Electricity
Energy September 2026 projections
06/27
Sources: Eurostat, Haver, and ECB calculations. Notes: median impulse responses (solid
line) and 68% credibility bands (shaded area) from a BVAR using oil price shocks from
Bańbura et al. (2023), calibrated to a 28% year-on-year oil price increase, matching
March's observed increase (month 0 on x -axis) over the first four months. Dashed lines
show realised data since the onset of the conflict in March 2026, as deviations from their
2006-2026 average to match the impulse responses. Oil, negotiated wages and consensus
expectations are in year-on-year rates. The latest observations are for July 2026.
Propagation of the oil shock: model
responses and realised data 15 20 25 30 35 40 45 50 55 60
0 1 2 3 4
Model-implied impulse response function (IRF)
Realised data
Brent oil
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0 1 2 3 4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0 1 2 3 4
Consensus
inflation
expectations
Negotiated
wages
month(s) month(s) month(s)(annual percentage changes; percentage point contributions)
(percentage point changes)
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HICP energy
Sources: Eurostat, LSEG, Weekly Oil Bulletin and ECB calculations.
Note: based on the short-term inflation projection (STIP) energy model ( Bańbura, Bobeica,
Giammaria, Porqueddu and van Spronsen, 2025), using Eurosystem macroeconomic
projection assumptions for the euro area, June 2026, and ECB staff macroeconomic
projection assumptions for the euro area, September 2026.
Transport fuels: model-based revisions
Sources: Eurostat, LSEG and ECB calculations.
Note: the latest observations for the futures of crude oil and refined product prices are for
21 May 2026 and 19 August 2026.
Refining margins
(percentage points) (EUR cents per litre) 0 5 10 15 20 25 30 35 40 45
2026 2027 2028
Petrol (September 2026 projections)
Diesel (September 2026 projections)
Petrol (June 2026 projections)
Diesel (June 2026 projections)
-6
-4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2026 2027 2028
Oil in euro Taxes
Distribution margin Refining margin
Transport fuels (STIP)
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Food inflation
Sources: Eurostat, HWWI (Hamburgisches WeltWirtschaftsInstitut) and ECB calculations.
Notes: the decomposition of the drivers explaining deviations in euro area food inflation
from its long-term average (calculated over the period from December 1996 to August
2026) follows Kuik et al. (2024). The latest observations are for August 2026 (flash).
Drivers of euro area consumer
food price inflation
Sources: Eurostat, Eurosystem staff macroeconomic projections for the euro area, June
2026 and ECB staff macroeconomic projections for the euro area, September 2026, HWWI
(Hamburgisches WeltWirtschaftsInstitut) and ECB calculations. Notes: the machine
learning (ML) model mean refers to the mean of a new machine learning model ensemble
for food inflation (Kuik et al., forthcoming). Short -term inflation projection (STIP) food, delta
approach, is the update of the Eurosystem macroeconomic projections, June 2026, using
the STIP food model (Banbura et al., forthcoming). The latest observations are for August
2026 (flash).
Food inflation short-term outlook
(percentage point deviations and contributions)
(annual percentage changes)
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
01/25 06/25 11/25 04/26 08/26
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
08/26
1.0
1.5
2.0
2.5
3.0
04/26 06/26 08/26 10/26 12/26 02/27 04/27 06/27 08/27
ML model mean (8 September 2026)
STIP food, delta approach (8 September 2026)
September 2026 projections
Food
Rubric
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NEIG and services inflation
Sources: Eurostat, ECB staff macroeconomic projections for the euro area, September
2026, and ECB calculations.
Notes: Quantile regression forest (QRF) estimates follow Lenza et al. (2025), with 69.5% of
the August data available. The latest observations are for August 2026 for NEIG inflation
(flash) and July 2026 for permanent and common component of inflation (PCCI) NEIG.
Non-energy industrial goods (NEIG)
01/26 04/26 07/26 10/26 01/27 04/27
NEIG
PCCI NEIG
September 2026 projections
QRF median (8 September 2026)
06/27
Sources: Eurostat, ECB staff macroeconomic projections for the euro area, September
2026, and ECB calculations.
Notes: Quantile regression forest (QRF) estimated on 8 September 2026 with 69.5% of
August data available, Lenza et al. (2025). Short-term inflation projection (STIP) services
from Durero et al. (forthcoming), estimated on 8 September 2026. The latest observations
are for August 2026 for services inflation (flash) and July 2026 for permanent and common
component of inflation (PCCI) services.
Services inflation
(annual percentage changes)
(annual percentage changes) 0 1 2 3 4
01/26 04/26 07/26 10/26 01/27 04/27
Services
PCCI services
STIP services (8 September 2026)
September 2026 projections
QRF median (8 September 2026)
06/27
Rubric
www.ecb.europa.eu©22
Underlying inflation
Sources: Eurostat, Harvard Dataverse and ECB calculations. Notes: persistent common
component of inflation (PCCI). ICARIS (Le Bihan et al. 2024) is a non-linear underlying
inflation measure based on persistent component of inflation estimated at a disaggregated
level. The July value for ICARIS is preliminary, assuming no change in industrial production
growth between June and July (data outcome not yet released). The latest observations are
for August 2026 (flash) for HICP excluding food and energy, HICP excluding energy and
HICP excluding unprocessed food and energy, and July 2026 for the remaining measures.
Measures of underlying inflation
1.5
2.0
2.5
3.0
3.5
01/26 03/26 05/26 07/26
HICPX
HICPXX
HICP excluding unprocessed food and energy
HICP excluding energy
Trimmed mean (10%)
Trimmed mean (30%)
Domestic inflation
08/26
1.5
2.0
2.5
3.0
3.5
01/26 03/26 05/26 07/26
Supercore
PCCI
PCCI excluding energy
ICARIS
Model-based measuresExclusion-based measures
Sources: Trade Data Monitor, Bureau of economic analysis (BEA), Eurostat and ECB staff
calculations.
Notes: “AI goods” is a basket of goods related to AI data centre construction ( Emter et al.
2026; Waugh, 2026). Based on US BEA tables (2017). Exposures weighted by AI share,
based on 2025 nominal trade data.
HICP exposure to AI goods
(annual percentage changes) (left-hand scale: percentage of output;
right-hand scale: percentage of HICP) 0 1 2 3 4 0 4 8 12 16
Phones Photo
equipment
Computers New
cars
All
items
Indirect use of AI goods
Direct use of AI goods
Euro area HICP weight (right-hand scale)
Rubric
www.ecb.europa.eu©23
Labour cost growth and wage trackers
Sources: Eurostat, ECB staff macroeconomic projections for the euro area, September
2026, and ECB calculations.
Note: The latest observations are for the second quarter of 2026.
Labour cost growth
Sources: ECB wage tracker and Indeed.
Notes: dashed lines denote forward-looking information. The latest observations are for
July 2026 for Indeed and for June 2027 for the ECB wage tracker based on agreements
signed until end-August 2026.
ECB and Indeed wage trackers 1 2 3 4 5 6
2025 2026 2027
ECB wage tracker
ECB wage tracker excluding one-off payments
Indeed wage tracker
06/27
(annual percentage changes) (annual percentage changes)
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2024 2025 2026
Compensation per employee
Compensation per hour
Labour cost index
CPE (September 2026 projections)
Rubric
www.ecb.europa.eu©
Sources: ECB Consumer Expectations Survey (CES) and ECB
calculations.
Notes: median perceptions/expectations for the CES using survey
weights. The latest observations are for July 2026 for CES and August
2026 for HICP (flash).
Consumer inflation expectations
in the CES
1.5
2.5
3.5
4.5
01/26 03/26 05/26 07/26
Perception of past inflation
Inflation expectation one year ahead
Inflation expectation three years ahead
Inflation expectation five years ahead
Headline HICP
08/26
Inflation expectations
Source: Survey of Monetary Analysts (SMA).
Note: interquartile range refers to point forecasts of respondents.
SMA HICP and HICPX inflation
expectations
Sources: Bloomberg, LSEG, ECB projections database and ECB calculations.
Notes: the left panel shows the latest inflation path derived from inflation fixing
contracts referring to HICPxT and the September quarterly MPE projections
for HICP. The right panel decomposes the 5-year in 5-years inflation-linked
swap rate into an inflation risk premium component and an expectation
component, which are averages from two affine term structure models as in
Joslin, Singleton and Zhu (2011) (see Burban et al. (2022)). The latest
observations are for 10 September 2026.
Euro area inflation path and 5y5y
ILS decomposition
(annual percentage changes) (annual percentage changes) (percentages per annum) 24
1.6
2.0
2.4
2.8
3.2
3.6
4.0
4.4
08/26 04/27 12/27
Fixings (latest)
HICP September
2026 projections
12/27
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
01/26 05/26 09/26
Inflation risk premium
component
Expectation component
5y5y ILS fitted rate
10/09/26
Rubric
www.ecb.europa.eu©
Sources: ECB staff calculations based on ECB staff projections and ECB -BASE model and Eurosystem model simulations.
Notes: the cut-off date for the technical assumptions and the global economy was 19 August 2026 and for the macroeconomic projec tions for the euro area 28 August 2026.
Simulations conducted under a forecast setting with the ECB -BASE with euro area monetary policy exogenous.
Overview of results of sensitivity and scenario analyses
(annual percentage changes) 25
Sensitivity and scenario analyses
HICP Inflation Real GDP Growth
2026 2027 2028 2026 2027 2028
3.0 2.5 2.1 0.9 1.4 1.5
Energy prices 25th - 75th percentiles 2.9 - 3.2 1.9 - 3.1 1.7 - 2.4 0.9 1.2 - 1.5 1.2 - 1.7
5th - 95th percentiles 2.7 - 3.6 1.2 - 4.7 1.2 - 3.2 0.9 0.9 - 1.7 0.4 - 2.1
Constant prices 3.0 3.0 2.9 0.9 1.2 1.2
Exchange rate 25th - 75th percentiles 3.0 2.3 - 2.5 1.8 - 2.2 0.9 1.2 - 1.4 1.2 - 1.6
Forward exchange rate 3.0 2.4 2.0 0.9 1.3 1.4
Middle East Milder 2.9 1.9 1.8 0.9 1.5 1.6
Adverse 3.1 3.2 2.3 0.9 1.1 1.4
Severe 3.3 5.4 3.2 0.8 0.4 1.4
Severe + jet fuel shortages 3.4 5.6 3.4 0.8 0.3 1.4
OVERALL 2.7 - 3.6 1.2 - 5.6 1.2 - 3.4 0.8 - 0.9 0.3 - 1.7 0.4 - 2.1
2026 SEPTEMBER BASELINE PROJECTIONS
Rubric
www.ecb.europa.eu©
Source: ECB staff calculations based on ECB-BASE model simulations for scenarios. Results for constant energy prices are the average of BMEs, NAWM II and ECB -BASE. Note: simulations conducted under a
forecast setting with the ECB-BASE with euro area monetary policy exogenous.
Real GDP growth
Euro area outlook in Middle East conflict scenarios
HICP inflation HICP excl. energy & food inflation
(quarter-on-quarter percentage changes) (annual percentage changes) (annual percentage changes)
Real GDP growth HICP inflation HICP inflation excluding energy and food
2026 2027 2028 2026 2027 2028 2026 2027 2028
September 2026 0.9 1.4 1.5 3.0 2.5 2.1 2.5 2.6 2.3
Milder scenario 0.9 1.5 1.6 2.9 1.9 1.8 2.5 2.5 2.2
Adverse scenario 0.9 1.1 1.4 3.1 3.2 2.3 2.5 2.8 2.4
Severe scenario 0.8 0.4 1.4 3.3 5.4 3.2 2.5 3.5 3.2
Constant energy
prices 0.9 1.2 1.2 3.0 3.0 2.9 - - -
-0.3-0.2-0.10.00.10.20.30.40.50.6
2026 2027 2028
September 2026 baseline Milder scenario Adverse scenario Severe scenario Energy sensitivity analysis with constant prices
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
2026 2027 2028
1.0
2.0
3.0
4.0
5.0
6.0
2026 2027 2028
1.0
2.0
3.0
4.0
5.0
6.0
2026 2027 2028 26
Rubric
www.ecb.europa.eu©
1.5
2.0
2.5
3.0
3.5
4.0
4.5
09/26 03/27 09/27
Range of ESCB measures of i*
Realised €STR
€STR forward curve (pre-July GovC)
€STR forward curve (latest)
€STR forward curve adjusted for term premia (latest)
Option-based 15th and 85th percentiles
31/12/2727
Forward curve and risk-free rates
Sources: Bloomberg, LSEG and ECB calculations.
Notes: risk-neutral percentiles are derived from 3-month Euribor options. Premia-adjusted
estimates are based on three models (two variations of Joslin et al. (2011), with and
without surveys, and one following Geiger and Schupp (2018)). Range for (nominal) neutral
rate i* (blue shaded range) reflects Eurosystem estimates. “Pre-July GovC” refers to 22
July 2026. The latest observations are for 10 September 2026.
Sources: LSEG, Bloomberg and ECB calculations.
Notes: the term premium and expectations decompositions are based on models following
Joslin et al. (2011) with and without surveys, and Geiger and Schupp (2018). The real rate
component is the OIS rate minus the corresponding inflation -linked swap rate. “Change
since January 2026” refers to change since 30 December 2025. The latest observations
are for 10 September 2026.
Decomposition of changes in
euro area overnight index swap (OIS) rates
(basis points)
€STR forward curve
(percentages per annum) 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70
10-year 30-year10-year
Inflation component
Real rate componentTerm premium component
Expectations component
Change since January 2026
Rubric
www.ecb.europa.eu©
EA FCI gap
95% confidence
interval
-6
-4
2022 2023 2024 2025 2026
TighterLooser-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
Real rates Long rate
Short rate Risk assets
FX Sovereign spreads
Changes since
10/09/26 July GovC
Financing conditions according to the
ECB-BIG index
(index) 28
Financing conditions
Sources: Bletzinger et al. (2026) and ECB calculations.
Notes: the Macro-Finance FCI is shown as a gap from its neutral long -run mean (see
Bletzinger, Martorana, Mistak, 2026). The bands show parameter estimation uncertainty.
“July GovC” refers to 22 July 2026. The latest observations are for 10 September 2026.
Euro area financial conditions index (FCI)
Sources: NL Analytics, PATSTAT, ECB, ECB projections database, Allayioti, Di Casola and
Magistretti (2026) and ECB calculations.
Notes: the index uses a BVAR model with mixed-frequency. "Price components" include
lending rates and the FCI; "Quantity components" include credit volumes and BLS data.
Shaded areas represent the 90% confidence bands. Change since July GovC refers to the
change with respect to July. The counterfactual assumes that the share of AI -patents after
June 2024 remained constant, conditioning only on the AI news shock. The latest
observations are for September 2026.
-2
2022 2023 2024 2025 2026
Confidence interval Price components
ECB-BIG index Quantity components
ECB-BIG w/o AI boom
-0.02
-0.01
0.00
0.01
0.02
TighterLooser
July GovC09/26
Changes since
(index)
Rubric
www.ecb.europa.eu©
Sources: ECB (balance sheet items) and ECB calculations.
Notes: for the quarterly frequency, the annual growth rate reports the
growth rate of the last month in the given quarter. The latest
observations are for July 2026.
Sources of money creation
Monetary aggregates and credit developments
Sources: ECB (balance sheet items) and ECB calculations.
Notes: bank loans are adjusted for sales, securitisation and cash pooling.
The latest observations are for July 2026.
Credit to firms in the euro area
Sources: ECB (balance sheet items) and ECB calculations.
Notes: bank loans are seasonally adjusted and adjusted for sales and
securitisation. The latest observations are for July 2026.
Loans to households in euro area
(left-hand scale: average monthly flows in EUR bn;
right-hand scale: annual percentage changes)
(left-hand scale: average monthly flows in EUR bn;
right-hand scale: annual percentage changes)
(left-hand scale: monthly flows in EUR bn;
right hand scale: annual percentage changes) 29
-3
-2
-150
-100
01/26 02/26 03/26 04/26 05/26 06/26 07/26
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)
01/26 02/26 03/26 04/26 05/26 06/26 07/26
Borrowing from banks
Net issuance of debt securities
Annual growth rate (right-hand scale)
01/26 02/26 03/26 04/26 05/26 06/26 07/26
Other lending
Credit for consumption
Loans for house purchase
Annual growth rate (right-hand scale)
Rubric
www.ecb.europa.eu©30
Sources: ECB (SHSS, CSEC).
Notes: reverse Yankees refers to euro-denominated bonds issued by US firms. Euro area
purchases refer to the non-MFI sector. The latest observations are for the second quarter
of 2026.
Issuance and absorption of reverse Yankees 0 2 4 6 8 10 12 14
Between Q1
2023 and Q1 2025
After Apr-25
tariff decision
Between Q1
2023 and Q1 2025
After Apr-25
tariff
decision
US government bonds
Reverse Yankees
Euro area purchases
Sources: ECB (SHSS) and Dealogic.
Notes: euro area purchases refer to the non -MFI sector. The latest observations are for the
second quarter of 2026.
US IPOs and euro area purchases of foreign equities
(average of quarterly flows in EUR billion) (average of quarterly flows in EUR billion)
US issuance and euro area financing 0 10 20 30 40 50 60 70 80
Between Q2
2025 and Q1 2026
Q2 2026
US
RoW excluding US
Euro area purchases 0 20 40 60 80 100 120 140
Between Q2
2025 and Q1 2026
Q2 2026
Proceeds
SpaceX IPO
IPOs
Rubric
www.ecb.europa.eu©31
Banks’ risk-taking and financing of AI firms
Sources: ECB (AnaCredit, balance sheet items) and ECB calculations.
Notes: the chart shows the 12-month growth rate per borrower group. Riskier (respectively
less risky) borrowers are those with a probability of default above (respectively below)
1.6%, corresponding to 75th percentile in the distribution of new loans, excludes the effect
of borrowers’ migrations between different risk status. Rescaled to match BSI dynamics.
The latest observations are for May 2026.
Loan growth by borrower riskiness
Sources: ECB (BSI, CSEC), LSEG Data & Analytics, datacenters.com, European Patent
Office Worldwide Patent Statistical Database and ECB calculations.
Notes: estimates show the difference in AI firms’ average annual credit growth compared
with non-AI firms since the first quarter of 2025. Estimations control for sector, size and
firm location. The latest observations are for the first quarter of 2026.
Financing of AI firms and
aggregate credit growth(annual percentages changes)
(percentage points)
12/21 09/22 06/23 03/24 12/24 09/25
Ex-ante less risky firms
Ex-ante riskier firms
AI
infrastructure
AI
developers
AI
adopters
90% confidence interval
Point estimate
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2026 Q1
AI
Rest of economy
Aggregate
growthExcess growth over non-AI firms
Rubric
www.ecb.europa.eu©
Sources: ECB (balance sheet items, MFI interest rates, Centralised
Securities Database, Money Market Statistical Reporting), IHS Markit
iBoxx and ECB calculations.
Notes: marginal funding costs weigh new business rates of each
component by outstanding amounts. The latest observations are for July
2026 (bars), 10 September for latest bank bond yields and interbank
rate.
Bank funding costs
Bank funding costs and lending rates
Sources: ECB (MFI interest rates), Bank of America Merril 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. The latest observations are for July 2026 (bars), and 10
September for latest cost of market -based debt.
Changes in firm costs of
financing
Sources: ECB (MFI interest rates) 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. The latest observations are for July 2026.
Changes in bank lending rates to
households for house purchase(basis points)
(basis points) (basis points) 32
Composite
bank
lending
rate
Loans up
to 1 year
Loans over
1 year and
up to 5
years
Loans over
5 years
Cost of
market
based debt
Cost of
debt
financing
Changes from December 2025 to July 2026
Changes from December 2025 to September 2026
Composite bank
lending rate
Loans up to 1
year
Loans over 1
year and up to 5
years
Loans over 5
years
Changes from December 2025 to July 2026
Composite
funding
costs
Overnight
deposits
Redeem-
able at
notice
deposits
Time
deposits
Bank
bond
yields
Interbank
rate
Changes from December 2025 to July 2026
Changes from December 2025 to latest
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Survey of Monetary Analysts: DFR expectations and balance of risks
Source: ECB Survey of Monetary Analysts (SMA).
Notes: total response counts for all projection horizons are as follows: 69 until the fourth
quarter of 2027 and 67 for the long -term outlook. Percentages may not sum to 100%.
Expected DFR level
at selected Governing Council meetings
Source: ECB Survey of Monetary Analysts (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 per respondents)