Euro Area Inflation Forecast Update

Goldman Sachs has raised its Euro Area headline inflation peak forecast to 3.4%yoy in 2026Q4, citing higher refined fuel costs and supply-chain pressures in core goods.

Key Takeaways

• 1.Headline inflation forecast upgraded to peak at 3.4%yoy in 2026Q4, driven by broadening energy price impacts and supply-chain distortions.
• 2.Core goods inflation forecast is raised to 1.8%yoy in 2027Q2 due to rising chemical feedstock prices and supply-chain pressures.
• 3.Services inflation is adjusted slightly higher to a 3.4%yoy peak in 2026Q3, but second-round wage effects are expected to remain limited.

Table of Contents

• Approaching the Peak in Energy Inflation
• Food Inflation to Increase on Higher Energy, Freight and Fertiliser Prices
• Pipeline Cost Pressures Point to Higher Core Goods Inflation
• Some Indirect Effects to Services Inflation, But Still Limited Scope for Second-Round Effects
• Headline Inflation to Peak at 3.4%yoy, Core at 2.7%yoy

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial