The ECB Survey of Professional Forecasters - First quarter of 2023

= Summary =

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Provider:

ECB

URL:

https://www.ecb.europa.eu//stats/ecb_surveys/survey_of_professional_forecasters/html/ecb.spf2023q1~af876c4cfb.en.html

Retrieved on:

Saturday, February 4, 2023

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Geotags:

UKRAINE

Summary

Key Points:

= Summary =
In the ECB Survey of Professional Forecasters (SPF) for the first quarter of 2023, HICP inflation expectations for 2023 and 2024 were revised up from the previous survey round (for the fourth quarter of 2022) to stand at 5.9% and 2.7% respectively.
[1] The upward revisions primarily reflect changes to expectations for inflation excluding energy, food, alcohol and tobacco (HICPX).
The profile for the expected unemployment rate was revised downward by between 0.1 and 0.2 percentage points across all horizons.
Results of the SPF in comparison with other expectations and projections
(annual percentage changes, unless otherwise indicated)
1) Longer-term expectations refer to 2027.
= 1 HICP inflation expectations revised up for 2023 and 2024 =
SPF respondents revised up their inflation expectations for 2023 and 2024.
These stand at 5.9% and 2.7% respectively, 0.1 and 0.3 percentage points higher than in the previous survey round (see Chart 1).
Inflation expectations for 2025, which were not surveyed in the previous round (for the fourth quarter of 2022), stood at 2.1%.
Inflation expectations: overall HICP inflation and HICP inflation excluding energy, food, alcohol and tobacco
(annual percentage changes)
Regarding the near-term outlook, revisions to expected HICPX inflation (i.e.
HICP excluding energy and food) were the main factor behind upward revisions to the 2023 and 2024 inflation forecasts.
Notwithstanding the upward revisions to the calendar year expectations for 2023 and 2024, there are some tentative signs that inflation expectations may be levelling out.
The “rolling horizon” expectations for 12 and 24 months ahead of the latest available data (i.e.
Although easing slightly, quantitative indicators of uncertainty surrounding the shorter and medium-term inflation outlook remained close to historically high levels.
Two-year ahead inflation expectations disagreement (measured by the standard deviation of point expectations) stood at 0.94 percentage points.
This is down from 1.25 percentage points in the previous round, but still four times the historical average since 1999.
Regarding labour costs, respondents cited a mix of elevated inflation and labour market tightness as factors influencing their forecast evolution.
In this round, forecasters expected two quarters of negative quarter-on-quarter growth (fourth quarter of 2022 and first quarter of 2023) before some recovery starting in the second quarter of 2023.
Overall they expect economic activity to stagnate, at around 0.0% on average between the fourth quarter of 2022 and the third quarter of 2023 (see Chart 7).
In more detail, nearly all forecasters expected at least one quarter of negative growth while 85% forecast a “technical recession” (i.e.
This chart shows the average probabilities they assigned to different ranges of unemployment rate outcomes in the longer term.
Respondents expected the
rate on the Eurosystem’s main refinancing operations to increase to 3.0% in the first quarter of 2023 and to 3.5% in the second quarter.
The peak expectation is for the fourth quarter of 2023 at 3.55% (although around 30% of respondents expected peak MRO interest rates of 4% or more).
Compared with the previous round (for the fourth quarter of 2022), the profile has been revised up by between 0.5 and 0.7 percentage points.