Economists raise inflation forecast for the Eurozone this year again

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Economists raise inflation forecast for the Eurozone this year again

Participants in the European Central Bank’s (ECB) Survey of Professional Forecasters raised their inflation expectations for this year again.

ECB announced the results of the Survey of Professional Forecasters for the first quarter of 2023. Accordingly, the annual harmonised inflation expectation in the Euro Area was 5.9 percent and 2.7 percent for 2023 and 2024, respectively.

Compared to the last quarter survey results of last year, the inflation forecast in the first quarter increased by 0.1 percentage points this year and 0.3 percentage points next year. Average long-term inflation forecasts in the survey decreased by 0.1 points to 2.1 per cent.

The survey participants’ gross domestic product (GDP) growth forecasts for the Euro Area were 0.2 percent, 1.4 percent and 1.7 percent for 2023, 2024 and 2025, respectively.

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This quarter, compared to the previous quarter, the 2023 growth forecast was revised upwards by 0.1 percentage points, while next year’s forecast was revised downwards by 0.2 percentage points. The average long-term GDP growth forecast remained unchanged at 1.4 per cent.

The average unemployment rate forecasts for 2023 and 2024 were revised downwards by 0.1 and 0.1 percentage points to 7 and 6.9 per cent, respectively. In 2025, the unemployment rate is expected to fall to 6.7 per cent. The long-term unemployment forecast was revised downwards by 0.2 percentage points to 6.4 per cent.

The ECB’s Survey of Professional Forecasters was conducted between 6-12 January and 58 professionals participated in the survey.

Meanwhile, according to preliminary data from the European Statistics Office (Eurostat), annual inflation in the Eurozone, which was 9.2 percent in December, fell to 8.5 percent in January.

 

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