Easing in Eurozone food inflation will only be temporary
Food inflation in the Eurozone is projected to remain stable in the near term, but rising commodity prices and climate issues may drive increases ahead.
Food inflation in the Eurozone is expected to remain soft in the near term, with forecasts indicating it will stay below 2% for the remainder of 2026. However, pressures from rising commodity prices and extreme weather conditions are likely to drive food price inflation up to around 3% in 2027.
Recent data shows that food prices have been surprisingly stable, primarily due to strong harvests and easing supply shocks. Despite the temporary nature of the Iran war-induced commodity shock, the impact of higher energy and fertiliser prices, alongside adverse weather events, is anticipated to contribute to an increase in inflation rates next year.
The European Central Bank’s projections may be overly optimistic, as they expect food inflation to peak at 3.7% in Q2 2027. However, current indicators suggest a more gradual rise, with the potential for significant upward pressure from ongoing geopolitical tensions and climate-related disruptions.
Download the report for more detailed insights.
You might also be interested in
This report was brought to you by the Macro team
Reliable and consistent economic forecasts, analysis, models and scenarios provide the insight necessary to make informed decisions in a fast-changing world.
