Ecb Survey Consumers Expect Slowing Inflation

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Ecb Survey Consumers Expect Slowing Inflation

ECB Survey - Consumers Expect Slowing Inflation

According to the latest ECB survey data published on Tuesday, eurozone consumers expect inflation to slow down in the next 12 months. Earlier, the EU consumers were expecting inflation to go higher, which made the situation alarming for policymakers.

If we look at the EU inflation, it was in the double-digit territory a few months ago but has since moved down. But experts believe that inflation will only come down to 2% in 2025.

After all, we can't ignore that nominal wage in the eurozone has also increased quickly, making it difficult for policymakers to control inflation.

The inflation Forecast Is Set At 4.1%

As per the ECB survey, consumers believe that inflation will likely fall to 4.1% by next year. Just a few months ago, the same forecast was set was 5.0%, which shows signs of improvement in consumer sentiment.

Similarly, the inflation forecast for the next 3 years has also gone down from 2.5% from an earlier value of 2.9%. The ECB officials conducted the survey after collecting data from 14,000 adults in the EU countries. For now, it appears that the jump in forecasted inflation during March has been reversed, which is a good sign.

The ECB said that inflation expectations among the younger population are inclined toward, the lower end. On the other hand, older respondents were not expecting the inflation to go down quickly.

In addition, the EU consumers also forecasted a modest increase in wages along with lower unemployment in the region.

However, the consumers were pessimistic when it came to the growth prospects of the EU block. In fact, many even forecasted a possible economic contraction in the EU region.

Overall, the inflation forecast by the EU consumers is in line with what the policymakers are working towards! This will likely strengthen the ECB to continue with its current policies to combat the inflationary pressure in the block.

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