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ECB observers see inflation on the way to the central bank target

2022-02-04T14:32:10.906Z


ECB observers see inflation on the way to the central bank target Created: 2022-02-04 15:25 The European Central Bank (ECB) asks economists four times a year about their growth and inflation forecasts. © Arne Dedert/dpa The European Central Bank (ECB) asks economists four times a year about their growth and inflation forecasts. The survey results play an important role in the deliberations of t


ECB observers see inflation on the way to the central bank target

Created: 2022-02-04 15:25

The European Central Bank (ECB) asks economists four times a year about their growth and inflation forecasts.

© Arne Dedert/dpa

The European Central Bank (ECB) asks economists four times a year about their growth and inflation forecasts.

The survey results play an important role in the deliberations of the ECB.

Frankfurt - According to economists, the European Central Bank (ECB) will gradually move towards its inflation target in the coming years, despite the currently skyrocketing inflation.

ECB monetary policy experts are assuming that consumer prices in the euro area* will increase by 1.9 percent in 2024, as the European Central Bank (ECB) announced in Frankfurt on Friday.

In 2026, they expect a precision landing at a value of 2.0 percent.

The ECB is aiming for this level of inflation as the optimal value for the economy in the currency area.

In the autumn, the longer-term forecast by economists was 1.9 percent.

ECB survey

The ECB surveys economists four times a year on their growth and inflation forecasts.

The survey results of the so-called Survey of Professional Forecasters (SPF) always play an important role in the central bank's monetary policy consultations.

The most recent survey took place between January 7th and 13th - the ECB received 62 responses.

US bank Morgan Stanley commented on the survey results that long-term inflation expectations have now returned to the target mark for the first time since 2013.

This is another data point consistent with the ECB's shift towards a slightly tighter monetary policy stance.

"The medium-term inflation expectations at the target level and a solid labor market justify a gradual path of monetary policy normalization," says the bank.

Recently, inflation in the euro area had soared well above the ECB target in view of skyrocketing energy prices and delivery bottlenecks.

In January, the rise in consumer prices was 5.1 percent, more than twice as high as the monetary watchdog had aimed for.

In the survey, the ECB monetary policy experts significantly increased their inflation expectations for this year.

You are now assuming an increase in consumer prices of 3.0 percent.

In the autumn survey, they had only estimated 1.9 percent for 2022.

For 2023, they are now expecting an inflation rate of 1.8 percent after 1.7 percent in autumn.

ECB: Companies expect stronger wage growth again

In the view of ECB chief economist Philip Lane, inflation of around two percent in the euro area requires average wage growth of around three percent a year, as he

said in an interview with the Lithuanian business newspaper

Verslo žinios

published ten days ago .

However, wage increases of this magnitude are currently not to be seen, he explained.

According to the ECB, however, companies are now expecting this to change.

They are now assuming that average wage growth of around two percent recently will move towards three percent or more this year, as the ECB announced on Friday.

This is particularly true where workers are difficult to find*, such as in construction or in road freight transport, as well as for IT experts or software engineers.

According to the ECB, these are the results of contacts between monetary authorities and representatives of 74 companies from the currency area between January 10th and 19th. 

(rtr)

*

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Source: merkur

All news articles on 2022-02-04

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