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Inflation forecasts for Europe in 2026/ Highest and lowest rates by country

2025-09-08 07:25:00, Ekonomi CNA

Inflation forecasts for Europe in 2026/ Highest and lowest rates by country

The economic outlook for Europe and the euro area is uncertain due to trade tensions and global risks, including tariff threats from the US. While global and regional economic developments are important, people are mainly focused on how these factors affect their daily lives. For households, inflation is one of the biggest concerns.

According to the European Central Bank (ECB) forecasts for June 2025, inflation in the euro area is expected to decrease to 2.0% in 2025 and further to 1.6% in 2026, before returning to 2.0% in 2027.

At the same time, energy inflation is projected to remain negative until the end of 2026 and then recover in 2027 due to climate change-related fiscal measures, according to the ECB.

Among the 30 European countries with available data, inflation is projected to increase in almost half of them by the end of 2025, compared to 2024.

However, in some cases, the change, whether an increase or a decrease, is very modest, at 0.3 percentage points or less.

The highest expected change in percentage point terms is expected to be in Lithuania, increasing from 0.9% to 4%, followed by Latvia (1.4% to 3.6%).

In Lithuania, rising food and energy prices are having a significant impact on the inflation rate. In Latvia, core inflation, which excludes energy and food, will remain high due to strong wage growth related to labor shortages, while food prices are also on the rise, according to the OECD report.

Inflation growth will also exceed 1 percentage point in Bulgaria (1.4 pp) and Hungary (1.2 pp) in this period.

In Italy, Finland and Ireland, the inflation rate is forecast to increase by 0.8 percentage points or more. /CNA





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