ECB: GDP estimates for 2023 and 2024 revised upwards. The latest survey of forecasters

Inflation expectations revised upwards for 2023 and 2024, but downwards for the long term. So in the European Central Bank’s (ECB) Survey of Professional Forecasters (SPF) for the first quarter of 2023, respondents revised their inflation expectations upwards for 2023 and 2024. These now stand at 5.9 respectively. % and 2.7%, an increase of 0.1 and 0.3 percentage points over the previous survey. The upward revisions reflect corresponding changes to inflation expectations excluding energy, food, alcohol and tobacco. According to respondents, these changes mainly reflect a combination of recent data, stronger and broader-than-expected indirect effects of energy price developments, as well as higher wage growth. Expectations for 2025, which had not been surveyed in the previous round, stand at 2.1%. Longer-term inflation expectations (for 2027) have been revised downwards by 0.1 percentage point, to 2.1% on average. GDP growth expectations remained broadly unchanged, with a stronger-than-expected positive drag on economic activity in the second half of 2022 weighing on 2023, but offset by slightly weaker expectations for the 2024 than previously reported. Long-term GDP growth expectations remained unchanged at 1.4%.