Nomura analysts expect the European Central Bank’s (ECB) June macroeconomic projections to include assumptions of higher market rates and exclude May’s Harmonized Indices of Consumer Prices (HICP). They anticipate that the HICP and core HICP forecasts will adjust between the previous baseline and a negative path, with GDP growth degenerating in 2026-2027 due to weaker Q1 data and mechanical effects, while inflation remains around the Q4 2028 target.

Inflation close to target, but slower growth

“The ECB will update its macroeconomic projections at its June meeting.”

“We expect that the deadline for adopting technical assumptions (i.e. prices of natural gas and crude oil, as well as market rates and exchange rates) will be May 19-20.”

“We expect that the projections for the real economy will be finalized on May 26-27.”

“This means that the new ECB forecasts assume increases of 65 basis points by December 2026, instead of the previously assumed 43 basis points, and the May HICP inflation data will not be included in the ECB projections.”

“We expect the HICP inflation and core HICP inflation forecasts to be revised to a level between the ECB’s baseline and the adverse scenario forecast in March.”

(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)