Finance
ECB cuts growth forecast again, raises 2025 inflation outlook
Published by Global Banking and Finance Review
Posted on March 6, 2025
1 min readLast updated: January 25, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on March 6, 2025
1 min readLast updated: January 25, 2026
The ECB has revised its euro zone growth forecast downward and increased its inflation outlook for 2025, with price stability expected by 2026.
FRANKFURT (Reuters) - The European Central Bank cut its economic growth expectations for the euro zone once more on Thursday and raised its projection for inflation this year, even as it predicted price growth back at target in 2026.
Having tamed once-runaway prices, the ECB has been steadily cutting interest rates for most of the past year and lowered its deposit rate for the sixth time on Thursday, with more easing still likely.
The euro zone's central bank now expects gross domestic product (GDP) in the currency bloc to expand by 0.9% this year, below the 1.1% predicted three months ago. Growth will then accelerate to 1.2% in 2026.
Inflation is now seen at 2.3% this year, above the 2.1% predicted in December, before falling to 1.9% in 2026.
The following are the ECB's projections for inflation and economic growth. Previous projections from December are in brackets.
2025 2026 2027
GDP Growth: 0.9 (1.1%) 1.2 (1.4%) 1.3% (1.3%)
Inflation: 2.3 (2.1%) 1.9 (1.9%) 2.0% (2.1%)
(Reporting by Balazs Koranyi; Editing by Catherine Evans)
The ECB now expects the euro zone's GDP to grow by 0.9% this year, down from the previous prediction of 1.1%.
The ECB has raised its inflation projection for this year to 2.3%, up from the earlier estimate of 2.1%.
The ECB forecasts inflation to decrease to 1.9% in 2026, following the 2.3% expected this year.
The ECB has cut its deposit rate for the sixth time on Thursday, indicating more easing may be likely.
The ECB projects GDP growth of 1.2% for 2025, slightly down from the previous estimate of 1.4%.
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