Update inflation model – The overlooked risks
Our Quant model based on machine learning predicts higher inflation in the euro area for the months starting in April than it did last month.
Commerzbank Economic Research
03/21/2025
Higher inflation forecasts are defying the drop in oil prices
In recent weeks, the fall in oil prices and the appreciation of the euro have fueled hopes that inflation will fall rapidly. Indeed, this could cause eurozone inflation to fall from 2.3% to 2.2% or even 2.1% in March. But from April onwards, our Quant model based on machine learning (see here ) expects higher inflation than previously assumed. The higher forecasts are due, among other things, to a further strong increase in food and services prices. This means that inflation is likely to remain above the ECB's target of 2% this year.
For full text see attached PDF-Version.
