Eurozone inflation is set to stay below the target of ‘below but close to 2 percent’ until 2017, the European Central Bank Survey of Professional Forecasters showed Friday.
Nonetheless, respondents raised their inflation outlook for this year and next. In 2015, inflation is seen at 0.2 percent instead of 0.1 percent estimated in the prior quarter.
Likewise, the estimate for 2016 was raised to 1.3 percent from 1.2 percent, while that for 2017 was retained at 1.6 percent. The SPF survey for the third quarter was conducted between June 30 and July 6.
The upward revisions mainly reflected the confirmation of an ongoing strengthening of activity and the impact of monetary policy measures.
Real GDP growth expectations were broadly unchanged at all horizons, standing at 1.4 percent for 2015 and 1.8 percent each in 2016 and 2017. The estimate for 2016 alone was revised, up marginally from 1.7 percent.
The bank said the balance of risks to GDP growth remains tilted somewhat to the downside for all three years. While developments in Greece were cited as a source of uncertainty and downside risk, the majority of respondents considered the likely impact on the euro area as a whole of a further deterioration in the situation to be limited.
The jobless rate is seen at 11 percent this year and 10.5 percent in 2016. It is then expected to fall to 10 percent in 2017. The estimates over all horizons were lowered by 0.1 percentage point.
The material has been provided by InstaForex Company – www.instaforex.com