The GDP Nowcast on Q4 2025, Q1 2026 and on First Six Months 2026 Inflation 3/27/2026 Tweet The GDP Nowcast on Q4 2025, Q1 2026 and on First Six Months 2026 Inflation Key points: The CBBH estimates annual real economic activity growth at 2.1%, in Q4 2025, which is identical to the nowcast from December 2025. According to the estimate for the last quarter of 2025, annual real GDP growth is projected at 1.9% for 2025, which is almost identical to the projection from the autumn round of medium-term macroeconomic projections (2.0%). Available high-frequency indicators do not point to an acceleration in economic activity at the beginning of 2026. The preliminary estimate of the annual real GDP growth rate for Q1 2026 is 2.1%, with a dominant contribution from the services sector, while the contribution from the manufacturing industry remains limited due to weak external demand and increased production costs. We estimate that headline inflation could be 3.5% and core inflation 4.2% in the first quarter of 2026, with domestic inflationary pressures dominating. Headline inflation has been revised downwards compared to the previous round of nowcasts (from 3.8% to 3.5%), partly due to the smaller effect of food price increases on the overall index, which indicates that domestic food price trends have not fully followed international trends recently. In the second quarter, we expect headline inflation to accelerate to the level of 3.9%, driven by rising energy prices and their spillover to rising prices of other goods and services. Even with this current inflation estimate, there is a significantrisk of an upward revision in the next round, due to heightened geopolitical risks.
