Economists raised inflation forecast for Eurozone again this year

Respondents to the European Central Bank’s (ECB) Professional Forecasters Survey have again raised their inflation expectations for this year.

The ECB has released its Professional Forecasters Survey 2023 first quarter results. Accordingly, the annual harmonized inflation expectation in the Eurozone was 5.9% and 2.7%for 2023 and 2024, respectively.

Compared to the last quarter survey results of last year, the inflation forecast for the first quarter increased by 0.1 points this year and 0.3 points for the next year. Average long-term inflation forecasts in the survey were announced as 2.1%, with a decrease of 0.1 percentage points.

Survey respondents’ GDP growth projections for the Eurozone were 0.2%, 1.4% and 1.7% for 2023, 2024 and 2025, respectively. In this quarter, there was an upward revision of 0.1 points in the 2023 growth forecast compared to the previous quarter, while a downward change of 0.2 points was observed in the forecast for the next year. Average long-term GDP growth forecast remained unchanged at 1.4%.

Average unemployment rate projections for 2023 and 2024 were revised downwards by 0.1 and 0.1 percentage points, respectively, to 7% and 6.9%, respectively. By 2025, the unemployment rate is expected to fall to 6.7%. The long-term unemployment forecast was revised down by 0.2 points to 6.4%.

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

Meanwhile, annual inflation in the Eurozone, which was 9.2% in December, declined to 8.5% in January, according to the leading data of the European Statistical Office (Eurostat).

Source: AA / Prepared by Irem Yildiz

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