Christine Lagarde, president of the European Central Bank (ECB), estimated today that inflation in the euro zone will remain at around 2% in the coming months, but acknowledged the high uncertainty “due to volatile global trade policies”.
“We expect inflation to remain close to our 2% target in the coming months. Risks to the outlook continue to be bidirectional, while uncertainty remains high due to volatile global trade policies,” said Lagarde, speaking at a hearing at the European Parliament’s Economic and Monetary Affairs committee in Brussels.
This means that “inflation remains close to the 2% target in the medium term” established by the ECB for price stability, he pointed out.
“The reduction in inflation towards our objective has been supported by a gradual moderation in wage growth”, with estimates predicting “slower wage growth for the remainder of the year and the first half of 2026”added Christine Lagarde.
Even so, the official added that “the outlook remains uncertain due to continued volatility in global trade, a possible deterioration in sentiment in financial markets and geopolitical tensions”.
All this will be taken into account at the next ECB meeting on monetary policy, in which the course to be followed will be decided, after the central bank opted to maintain the main interest rates at the October meeting.
In mid-November, the European Commission estimated that inflation in the euro zone would remain at around 2%, the ECB’s target for price stability, until 2027, after having reached records due to the war and energy crisis.
“Inflation in the euro area is expected to continue to fall, reaching 2.1% in 2025 and stabilizing at around 2% over the horizon. In the EU, inflation is expected to remain slightly higher, falling to 2.2% in 2027”indicated the community executive in its autumn economic forecasts, released three weeks ago.
After the euro zone faced a sharp rise in inflation, mainly due to the abrupt increase in energy and food prices following the war in Ukraine, the community executive now predicts that inflation in the single currency area will slow down from 2.4% in 2024 to 2.1% in 2025, and then remain globally stable at 1.9% in 2026 and 2.0% in 2027.
In the EU, inflation is expected to fall from 2.6% in 2024 to 2.5% in 2025, before decreasing to 2.1% in 2026 and reaching 2.2% in 2027.
Since the start of the war in Ukraine, caused by Russia’s invasion in 2022, the eurozone has faced a sharp rise in inflation.
These external shocks pushed inflation well above the 2% target set by the ECB to guarantee price stability, affecting household purchasing power and business costs.
Although inflation has begun to slow down with the normalization of energy markets and the action of monetary policy, it still remains above desirable levels, maintaining price stability as a central challenge for the ECB.