Results of the ECB Survey of Professional Forecasters for the first quarter of 2023

  • HICP inflation expectations revised up for 2023 and 2024, but down for longer term
  • Real GDP growth expectations largely unchanged
  • Unemployment rate expectations revised down

In the European Central Bank’s (ECB) Survey of Professional Forecasters (SPF) for the first quarter of 2023, respondents revised up their inflation expectations for 2023 and 2024. These now stand at 5.9% and 2.7% respectively; 0.1 and 0.3 percentage points higher compared with the previous survey round. The upward revisions reflect corresponding changes to expectations for inflation excluding energy, food, alcohol and tobacco (HICPX). According to respondents, these changes mainly reflect a combination of recent data outturns, ongoing stronger and broader than expected indirect effects of energy price developments as well as higher forecast wage growth. Expectations for 2025, which were not surveyed in the previous round, stand at 2.1%. Longer-term inflation expectations (for 2027) were revised down by 0.1 percentage points to 2.1% on average.

GDP growth expectations were largely unchanged with positive “carry-over” from stronger than expected economic activity in the second half of 2022 affecting 2023, but being offset by slightly weaker expectations for 2024 than previously reported. Longer-term GDP growth expectations remained unchanged at 1.4%.

Unemployment rate expectations were revised down for all horizons by between 0.1 and 0.2 percentage points. Following an expected increase to 7.0% in 2023 (the unemployment rate stood at 6.5% in November 2022) the unemployment rate is expected to decline gradually to 6.4% by 2027.

Table: Results of the ECB Survey of Professional Forecasters for the first quarter of 2023
(annual percentage changes, unless otherwise indicated)
Survey horizon 2023 2024 2025 Longer term(1)
HICP inflation
Q1 2023 SPF 5.9 2.7 2.1 2.1
Previous SPF (Q4 2022) 5.8 2.4 2.2
HICP inflation excluding energy, food, alcohol and tobacco
Q1 2023 SPF 4.4 2.8 2.3 2.0
Previous SPF (Q4 2022) 3.9 2.6 2.1
Real GDP growth
Q1 2023 SPF 0.2 1.4 1.7 1.4
Previous SPF (Q4 2022) 0.1 1.6 1.4
Unemployment rate(2)
Q1 2023 SPF 7.0 6.9 6.7 6.4
Previous SPF (Q4 2022) 7.1 7.0 6.6
1) Longer-term expectations refer to 2027.2) As a percentage of the labour force.

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