According to respondents, these changes mainly reflect a combination of recent data outturns, ongoing stronger and broader-than-expected indirect effects of energy price developments as well as higher forecast wage growth.
Longer-term inflation expectations (for 2027) were revised down by 0.1 percentage points to 2.1 per cent on an average, said an ECB release.
Gross domestic product (GDP) growth expectations were largely unchanged with positive ‘carry-over’ from stronger than expected economic activity in the second half of 2022 affecting 2023, but being offset by slightly weaker expectations for 2024 than previously reported. Longer-term GDP growth expectations remained unchanged at 1.4 per cent.
Unemployment rate expectations were revised down for all horizons by between 0.1 and 0.2 percentage points. Following an expected increase to 7 per cent in 2023 (the unemployment rate stood at 6.5 per cent in November 2022), the unemployment rate is expected to decline gradually to 6.4 per cent by 2027.
ALCHEMPro News Desk (DS)
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