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The latest Survey of Professional Forecasters (SPF) sees inflation expectations revised higher by 0.7pp for 2021 compared to the previous quarterly survey, data published Friday by the European Central Bank showed. Expectations for 2022 and 2023 were unchanged in the Q2 report. They now see HICP inflation expectations at 1.6%, 1.3% and 1.5% for 2021, 2022 and 2023, respectively.
Respondents consider the factors causing the upward revision as temporary, with long-term inflation expectations still at 1.7%, unchanged from the Q1 SPF.
SPF respondents lowered their growth forecasts for real GDP for 2021, but revised it up for 2022, suggesting a further delay of the recovery. GDP is projected to return to 2019 levels in 2022, however this would leave growth 2.6% lower than the level for 2022 implied the survey before the pandemic hit Europe. Long-term growth expectations remained unchanged at 1.4%. Unemployment expectations were revised down for 2021-2023 and the long-term outlook remained at 7.4%.
Source: ECB
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.