The Bank of Greece estimates that inflation will rise to 3.5% in 2026, up from 2.9% in 2025, driven by higher energy prices and continued price pressures in the services sector, according to the central bank’s latest Inflation Monitor.

Inflationary pressures are expected to ease in the coming years as energy commodity prices are projected to decline. Inflation is forecast to fall to 2.7% in 2027 and 2.2% in 2028.

According to the latest forecasts by experts, inflation in the euro area is expected to peak at 3.6% in the fourth quarter of 2026 (2026 Q4), due to a sharp rise in energy prices, before falling rapidly to 2.5% in the second quarter of 2027 (2027 Q2). This decline is expected to be driven mainly by strong downward base effects in the energy sector. Headline inflation is expected to stabilize at around 2.0% over the medium term, as the contribution of energy inflation approaches zero and the indirect/second-round effects of the energy shock remain limited.

In Greece, headline consumer price inflation (CPI) followed an upward trend during the first five months of 2026. It declined in June and July but rebounded to 3.7% in August, bringing the average inflation rate to 3.6% during the first eight months of 2026.

The rise in inflation in August was linked to increases across all five major components, particularly services and energy inflation. Core inflation also increased significantly in August, in line with the rise in services inflation, which was driven by a notable increase in accommodation services prices.

According to the Inflation Monitor, following these developments, expectations for monetary policy in the euro area point to one more 0.25 percentage-point interest-rate increase by the European Central Bank (ECB) during 2026, following the most recent increase the previous week.