The European Central Bank (ECB) has proposed a quantitative framework in its Economic Bulletin to assess how plausible alternative economic scenarios are relative to baseline projections, using historical patterns. Applied to the Middle East conflict scenarios accompanying the September 2026 ECB staff projections, the framework finds the severe scenario less empirically plausible than the milder and adverse scenarios.
The methodology evaluates joint paths for real gross domestic product (GDP) growth and Harmonised Index of Consumer Prices (HICP) inflation, capturing relationships both between the variables and over time. Each scenario is assessed against rolling historical windows of 20 years, with its final score based on the historical period most favourable to its outcomes. The index ranges from 0, indicating virtually no historical precedent, to 100, indicating outcomes as plausible as the baseline. It measures empirical plausibility rather than simply the size of deviations from the baseline.
The milder conflict scenario scores between 82 and 96 across the different approaches, compared with 56 to 85 for the adverse scenario. A separate comparison illustrates why the relationships between variables and across time matter: the adverse scenario scores about 56, while a hypothetical scenario of constant growth and inflation with similar overall deviations from the baseline scores almost zero. Ignoring either relationship can therefore produce misleading assessments. The index does not estimate the probability of the events underlying a scenario and should be interpreted alongside its narrative and expert judgement. Low scores do not remove the policy relevance of severe scenarios or outcomes with little historical precedent.