ECB cut its deposit rate by 25bps to 2.50% as expected. It maintains a data-dependent stance and stressing it is “not pre-committing to a particular rate path” amid rising uncertainty.
ECB noted that disinflation process remains on track, with inflation upgrade reflects stronger energy prices. Growth forecasts for 2025 and 2026 were downgraded due to weaker exports and investment, driven partly by trade and broader policy uncertainty.
In the new economic projections:
- Headline inflation to average 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027.
- Core inflation to average 2.2% in 2025, 2.0% in 2026, and 1.9% in 2027.
- GDP to grow 0.9% in 2025, 1.2% In 2026, and 1.3% in 2027.
