Late 2027

STATEC published its revised inflation forecast on Thursday, and the numbers are better than expected. Three months ago, the national statistics institute was predicting 2.5% inflation for 2026. Now they have cut that to 1.8%.

Two factors drove the change. First, the Middle East conflict calmed down in June. Oil prices dropped significantly from their spring peak, when the Strait of Hormuz was closed during the US-Israeli campaign against Iran. Brent is now around $80 a barrel, down from over $110 in May. Second, the Tripartite agreement struck in early June between the government and social partners brought in measures to curb energy price rises, effective immediately in July and August.

The practical consequence for workers: the next index tranche, the automatic wage adjustment that keeps salaries in step with inflation, has been pushed back. In May, STATEC expected it in the second trimester of 2027, between April and July. Now they are forecasting late 2027.

The last tranche fell this June. During the worst of the Iran conflict, STATEC modelled scenarios where three tranches could have fallen between June 2026 and September 2027. The coalition agreement says that if more than one tranche falls due within a year, a Tripartite group must convene to decide on measures. In the current circumstances, that looks unlikely to be needed.

STATEC is not celebrating. They remain cautious because the geopolitical situation is volatile. If the Middle East escalates again and energy prices spike like they did in the spring, a tranche could still fall before the end of this year. They are forecasting higher inflation for 2027 than in their May estimate, because energy price rises feed through to other products, particularly food, with a delay. US tariffs will also play a role.

But for now, the news is good. Inflation is down, wages are stable, and the Tripartite process seems to have done what it was designed to do: absorb a shock, spread the cost, and keep the economy from overheating. The index system, much debated and often criticised, did not trigger. That is not a failure. That is it working as intended.

The next time someone argues that the index is too rigid or too automatic, this is the counterexample. Sometimes the best outcome is that nothing happens. Late 2027 is not far away in the grand scheme. It is far enough.