By Hans Bentzien
FRANKFURT (Dow Jones)–The monetary policy analysts regularly surveyed by the European Central Bank (ECB) expect that inflation in the euro area will only be stable at 2 percent from the second quarter of 2026. As the survey conducted ahead of the latest ECB Governing Council meeting shows, these analysts already see inflation at 2.0 percent in the fourth quarter of 2025, but they expect it to rise again to 2.1 percent in the first quarter of 2026 becomes. From the second quarter of 2026, a permanent 2.0 percent is forecast. Core inflation will therefore reach 2.0 percent in the third quarter of 2025.
According to the ECB announcement, analysts expect stagnation in gross domestic product (GDP) for the third and fourth quarters of 2023 and slight growth again (plus 0.1 percent) for the first quarter of 2024. According to experts, the unemployment rate will hardly move in the next few years.
According to the survey, the ECB will reduce its deposit rate for the first time in September 2024 (by 25 basis points) and reach the long-term expected value of 2 percent in the fourth quarter of 2026. The bond holdings purchased under the PEPP program will therefore only begin to shrink from the first quarter of 2025.
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DJG/hab/apo
(END) Dow Jones Newswires
October 30, 2023 05:47 ET (09:47 GMT)