ECB: Inflation Fears Grow — Consensus
The ECB Q2 survey of professional forecasters showed inflation expectations for this year were revised up to 3.6% from 3.0%. Forecast for next year were revised up to 2.6% from 2.2%.
2010 is seen at 2.1% on average and longer term inflation forecast were revised up to 2.0% from 1.9%. Especially the latter will ring alarm bells at the ECB, even though 2.0% is still at the upper limit of the ECB’s definition of price stability. Forecasters have left their 2008 growth projection unchanged at 1.6%, while the 2009 forecast has been revised down to 1.3% from 1.6% previously.
2009 growth is seen at 1.8% and longer term trend growth was left unchanged at 2.1%.