Growth forecasts and inflation forecasts for 2016 and 2017 have been revised downwards, according to the European Central Bank’s (ECB) latest survey of economists.
The ECB reports that its survey of professional forecasters for the second quarter reveals that real GDP growth expectations have been lowered slightly for 2016 and 2017, as have inflation expectations.
Economists have cut their inflation forecasts for this year by 0.4 percentage points compared with the previous survey, to 0.3%, the ECB reports.
“They reported that the downward revisions mainly reflected oil price developments since the previous quarterly survey, conducted in January,” the ECB says.
Average inflation expectations for 2017 and 2018 are now 1.3% and 1.6%, respectively, the says the ECB. “Respondents envisage a profile of moderate but gradually increasing underlying inflation, which is shaped by the ongoing expansion of economic activity,” it says in the report.
Real GDP expectations were also revised downward, by 0.2 percentage points. Economists now expect GDP growth to come in at 1.5% in 2016, rising slightly to 1.7% by 2018. “Respondents expect economic growth to be driven by domestic demand, supported by monetary policy and the current low level of energy prices,” the ECB says.
The report is based on a survey of experts affiliated with financial and non-financial institutions within the European Union.