ECB March 2026 projections flag a fragile euro-area recovery amid energy shock
ECB's March 2026 projections for the euro area foresee real GDP growth of 0.9% in 2026, 1.3% in 2027 and 1.4% in 2028, with headline inflation peaking around 3.1% in mid-2026 before easing to about 2.0–2.1% by 2027–28; energy-price shocks from the Middle East drive the near-term inflation surge, while domestic demand and a resilient labor market support a gradual recovery. The baseline uses energy-price paths up to 11 March 2026, and includes alternative downside scenarios (adverse and severe) showing larger, longer-lasting energy disruptions and higher inflation with weaker growth. Fiscal loosening in 2026 is expected to give way to consolidation in 2027–28, with global conditions weighing on euro-area foreign demand.