Financial experts in the European Union have lowered their inflation expectations for the coming years, a European Central Bank survey published Friday showed, reflecting the institution's complicated path to its price stability target. In its quarterly survey of professional forecasters, the ECB found average price growth predictions had been revised down 0.1 percentage points for 2017, 2018 and 2019.
Forecasters now expect inflation to reach 1.5 percent this year, followed by 1.4 percent next year and 1.6 percent in 2019. The latest survey results are largely in line with the ECB's own predictions, although central bank staff expect inflation to slow slightly in 2018 to 1.3 percent.
ECB policymakers use the central bank's powers to try and hold inflation at its target of close to, but below 2.0 percent - the level believed to be most favourable to growth. The bank has intervened massively in the economy in recent years to fend off the threat of deflation, offering cheap loans to banks, setting interest rates at historic lows and buying tens of billions of euros per month in government and corporate bonds.
But while central bank governors believe their policy has boosted economic growth in the 19-nation eurozone - reaching 0.6 percent in the first quarter of 2017- there has been little sign of a corresponding surge in inflation. That pattern was reflected in Friday's survey, with forecasters upping their growth predictions for the coming years even as they saw rate of inflation turning out lower.
The private-sector experts match the ECB's expectations for 1.9-percent growth this year and 1.8 percent in 2018, but remain slightly less confident for 2019 with a 1.6-percent prediction - 0.1 percentage points lower than the central bankers. Friday's survey of 56 professional forecasters was conducted on July 3-7.