FRANKFURT (Reuters) – According to a survey by the ECB, consumers in the euro zone expect the economy to shrink and inflation to remain high.
On average, consumers expect inflation to still be 5.0 percent 12 months from now, according to a June survey by the European Central Bank (ECB) published on Thursday. In three years they reckoned with an inflation rate of 2.8 percent. This would still be well above the euro keeper’s target of two percent inflation as the ideal value for the economy.
Around 14,000 consumers aged 18 and over from Belgium, Germany, Spain, France, Italy and the Netherlands took part in the monthly Consumer Expectations Survey (CES). It is the first time that the ECB is publishing the results. In the future she wants to make the results available on her website every month. According to their latest projections from June, ECB economists expect an average inflation rate of 3.5 percent for the coming year and 2.1 percent for 2024.
According to the ECB survey, consumers also expect the economy to contract over the next 12 months. A decline in economic output of 1.3 percent and an unemployment rate of 11.5 percent are then expected. For comparison: ECB economists recently expected economic growth of 2.1 percent and an unemployment rate of 6.8 percent for 2023. The survey participants also assumed that high inflation would continue to eat away at their income. They expect income growth to be just 0.9 percent 12 months from now. This is then offset by an increase in expenditure of 3.9 percent.
(Report by Frank Siebelt, edited by Christian Gtz. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets).)