Euro zone inflation could rise slower than earlier thought but growth may stay resilient to the recent slowdown, the European Central Bank’s Survey of Professional Forecasters showed on Friday, underpinning the bank’s call for patience in removing stimulus, Reuters reports.
Headline inflation could rise to 1.6 percent next year and 1.7 percent in 2020, both 0.1 percentage point below expectations from three months ago, according to the survey of 58 forecasters, an important input in the ECB’s policy deliberations.
The ECB targets inflation at just below 2 percent and the survey projected price growth rising back to 1.9 percent by 2022, in line with an earlier forecast.
The ECB decided on Thursday to keep policy unchanged, arguing that a slowdown in growth was not serious enough to warrant a broader rethink of policy, even if patience in curbing stimulus further was necessary. [nL8N1S30Y7]
Markets expect the ECB to end its 2.55 trillion euro bond purchase program this year despite the economic rough patch and see rates rising for the first time in years sometime around the middle of 2019.
While acknowledging the slowdown, Draghi on Thursday said that growth remained solid and the survey confirmed his confidence as projections for 2018 and 2019 were both lifted by 0.1 percentage point to 2.4 percent and 2.0 percent.