The European Central Bank (ECB) is expected to keep its deposit rate at 2.00% at least until the end of the year, according to a Reuters poll. This marks the longest period of steady borrowing costs since the era of negative rates, despite geopolitical risks. Inflation declined to 1.7% in January, its lowest in 16 months, prompting concerns that price growth might slow too much. However, the economy remains strong.
In a recent poll, most economists predict the ECB will maintain steady rates, target inflation near 2%, and stable growth until 2027. This prediction has not changed since October. If this occurs, it will be the longest period without rate changes since the pandemic. The euro zone economy grew by 0.3% in the last quarter of 2025 and is expected to maintain similar growth through 2026, with projections of 1.2% growth this year and 1.4% in 2027.
Inflation is forecast to average 1.7% this quarter and rise to 1.9% next quarter, hovering around that level through 2026. While domestic resilience is expected to outweigh external issues, concerns about uncertainty in monetary policy remain. Lastly, the euro is projected to recover losses over the coming year.
With information from Reuters
