Inflation expectations rise in the eurozone

The European Central Bank (ECB) announced the results of its Consumer Expectations Survey for September. According to the survey, consumers’ inflation expectations for the next 12 months rose from 3.5 percent to 4 percent.

Consequently, the 12-month average inflation expectation of eurozone consumers increased from 3.5 percent to 4 percent in September, while the inflation expectation for the next 3 years remained unchanged in the 2 .5 percent.

The region’s consumer expectations for economic growth decreased compared to the previous month, and consumers’ economic growth expectations for the next 12 months, which were -0.8 percent in August, decreased to -1.2 percent in September.

While consumers expect unemployment to be 11.4 percent on average over the next 12 months, this rate was predicted to be 11.1 percent in August.

Consumers, who predicted house prices would rise 2.2 percent over the next 12 months, were expecting a 2.3 percent increase in August.

While the ECB targets 2 percent inflation in the medium term, the bank’s Consumer Expectations Survey is published monthly.

The survey is carried out by interviewing approximately 14 thousand people from Germany, France, Italy, Spain, the Netherlands and Belgium, which represent approximately 85 percent of the eurozone’s GDP.

WILL BE FOLLOWED CLOSELY FOR MONETARY POLICY

Inflation expectations play an important role in the ECB’s monetary policy. How far and at what pace the ECB will go in terms of interest rate hikes will determine the outlook for inflation.

It should be noted that the ECB took the fastest tightening step in history by raising interest rates by a total of 450 basis points from July 2022, despite the expectation of a recession in the economy.

On the other hand, according to data from the European Statistical Office (Eurostat), the consumer price index (CPI) of the euro zone increased by 2.9 percent annually in October. (AA)