This implies that forecasters now expect prices to be between 6.7% and 7.8% lower at all horizons than they had expected in the previous survey (see panel (c) of Chart 12). SPF respondents have revised down their real GDP growth forecasts, in particular for 2020, and now forecast real GDP growth of 1.1% for 2019, 1.0% for 2020 and at 1.3% for 2021 (see Chart 6). Find out how the ECB promotes safe and efficient payment and settlement systems, and helps to integrate the infrastructure for European markets. The upward profile of expected inflation is similar to forecasts published in other surveys, albeit at a slightly lower level (see Table 1). In line with their overall assessment that near-term uncertainty has decreased, the width of forecasters’ probability distributions for inflation in the longer term also moved down slightly from the elevated levels they had reached in Q4 2019. Longer-term inflation expectations are unchanged at 1.8%. To do this, we use the anonymous data provided by cookies. This chart shows the average probabilities they assigned to unemployment rate outcomes in the longer term. Below are some of the key results from the European Central Bank’s (ECB) survey of professional forecasters, published this Friday. Respondents’ average expectations were for: USD oil prices to remain broadly unchanged at around USD 63 per barrel until 2022; the euro to appreciate slowly against the dollar until 2022; the ECB’s main refinancing rate to start lifting slightly off the zero lower bound only in 2022; and wage growth to be in the range 2.2-2.3% over the entire forecast horizon. The mean expectation for the rate on the ECB’s main refinancing operations was for it to remain around 0% in the near term and to increase marginally to 0.04% in 2021. SPF : Survey of Professional Forecasters (71170) Forecasts on Euro area GDP growth rates (year-on-year) provided by professional forecasters of the private and public sector. Longer-term expectations for HICP inflation excluding energy, food, alcohol and tobacco were revised down by 0.1 p.p. At the beginning we analyse forecast accuracy of ECB inflation projections relative to private sector forecasts. Averages of SPF respondents’ point forecasts for annual HICP inflation stand at 1.2%, 1.4% and 1.5%, for 2020, 2021 and 2022, respectively (see Chart 1). For the latter, the phase one deal was seen as defusing tensions somewhat and halting, for now, a further escalation of measures. (2022 was not surveyed in the previous round.) Downloadable! Despite the perceived reduction in uncertainty regarding global trade and Brexit, the impacts of a further escalation of the trade conflict between the United States and China, alongside a possible increase of tariffs on car imports from the EU, continue to be the most cited downside risk. Browse the ECB’s reports, publications and research papers and filter them by date or activity. The risk assessment of the respondents based on their qualitative comments remained very similar to the previous survey and was, on balance, tilted to the downside. For the longer-term forecast, a slightly higher probability than in the previous survey was assigned to outcomes of 1.5% or higher (44% compared to 42%). Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. [1] These figures for 2020 and 2021 are the same as they were in the previous (Q4 2019) survey round. Note: The SPF asks respondents to report their point forecasts and to separately assign probabilities to different ranges of outcomes. As with other variables (across horizons), forecasters’ uncertainty about the unemployment rate in the future, as measured by the average width (standard deviations) of the reported probability distributions, has been greater after the financial crisis than it was before. To do this, we use the anonymous data provided by cookies. A few forecasters mentioned upside risks including an early resolution of the trade conflicts and an orderly Brexit. In their qualitative comments, some respondents explained that they saw the risks to the downside, citing both the risk that the euro area economy will grow more slowly than expected and the risk that the external environment will prove more disinflationary than at present in their baseline forecasts. Discover more about working at the ECB and apply for vacancies. On average, in 2019 43% of SPF respondents reported longer-term inflation expectations of 1.7% or lower compared with the average of 17% over the period from the first quarter of 1999 to the first quarter of 2014. As the future movements of financial time series like the European Central Bank’s benchmark rate are exposed to uncertainty, financial market participants regularly have to rely on professional analysts’ forecasts. These results represent downward revisions of 0.1 percentage points for both 2020 and 2021. Survey data on expectations and economic forecasts play an important role in providing better insights into how economic agents make their own forecasts and why agents disagree in making them. Learn more about how we use cookies, We are always working to improve this website for our users. The ECB Survey of Professional Forecasters (SPF) collects information on the expected rates of inflation, real GDP growth and unemployment in the euro area at several horizons, ranging from the current year to the longer term. Expectations for inflation excluding energy, food, alcohol and tobacco (HICPX) were also largely unchanged for 2020 and 2021, and continue to imply a gradual upward movement (see Chart 1). The longer-term expectations for HICP inflation excluding energy, food, alcohol and tobacco (HICPX) also remained largely unchanged and, in aggregate, continued to stand at 1.6%. Probabilities of low growth (for example, less than 1.0%), while decreasing slightly, still stand at relatively elevated levels for both horizons. This chart shows the average probabilities they assigned to different ranges of real GDP growth outcomes in the longer term. This essentially unchanged profile followed four successive rounds of downward revisions (between the Q4 2018 and Q4 2019 rounds). To do this, we use the anonymous data provided by cookies. In 2018 the width of forecasters’ probability distributions for inflation in the longer term ticked up from the level around which it had fluctuated for most of the post-global financial crisis period. The survey … The survey polls America's top business economists, collecting their forecasts of U.S. economic growth, inflation, interest rates, and a host of other critical indicators of future business activity. Notes: The SPF asks respondents to report their point forecasts and to separately assign probabilities to different ranges of outcomes. Note: The SPF asks respondents to report their point forecasts and to separately assign probabilities to different ranges of outcomes. This chart shows the average probabilities they assigned to real GDP growth outcomes in the longer term. Unemployme Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. The Survey of Professional Forecasters (SPF) is a quarterly survey of macroeconomic forecasts for the economy of the United States issued by the Federal Reserve Bank of Philadelphia. less than 1.0%) have risen sharply over the latest three rounds. Notes: The SPF asks respondents to report their point forecasts and to separately assign probabilities to different ranges of outcomes. Longer-term growth expectations (which refer to 2024) remained stable at 1.4%. Survey of Professional Forecasters, the European Central Bank’s Survey of Professional Forecasters (ECB’s SPF) and the Bank of England’s Survey of External Forecasters have gained prominence in economic and policy discussions. This paper analyses formation of inflation expectations in the euro area. For 2020, the latest SPF results are more optimistic than those published in the Consensus Economics and Euro Zone Barometer surveys (see Table 1). Real GDP growth expectations were also broadly unchanged, standing at 1.1%, 1.2%, and 1.4% for 2020, 2021 and 2022, respectively. The balance of risks remained to the downside, as has been the case since the global financial crisis; this measure has, however, recovered somewhat from the lows seen over the 2016-2017 period. US dollar-denominated oil prices (per barrel) were expected to remain broadly stable at around USD 60 over the period 2020-21. This measure has recovered somewhat from the lows seen over the 2016-17 period and the reduction could reflect the fact that forecasters have incorporated some of their previous downside risks into their baseline forecasts (see Chart 5). PDF ISSN 2363-3670, QB-BR-20-001-EN-NHTML ISSN 2363-3670, QB-BR-20-001-EN-Q, We are always working to improve this website for our users. Browse the ECB’s reports, publications and research papers and filter them by date or activity. • 2019 growth seen at 1.8%; down from 1.9%. <0.0%) eased back slightly (to 2.6% from 2.9% – see Chart 5) but remained above its historical average of 1.0%. Results of the SPF in comparison with other expectations and projections, (annual percentage changes, unless otherwise indicated). The European Social Survey runs a programme of research to support and enhance the methodology that underpins the high standards it pursues in every aspect of survey design, data collection and archiving. For 2020 and 2021, there was a narrowing of the probability distributions, with increases of the probability in the range 1.0-1.4%, while the probabilities for outcomes toward the tails of the distributions (both to the downside and upside) decreased slightly. In line with the downward revisions to point forecasts, the aggregate probability distributions also shifted towards lower values. Of the 39 respondents who reported longer-term inflation expectations in the Q1 2020 and Q4 2019 SPF rounds, 25 reported unchanged expectations, seven revised their expectations up and seven revised their expectations down. Some respondents mentioned that their baseline scenarios factor in some stimulus from fiscal loosening, on top of the small expected effect of the ECB’s recent monetary policy measures. Get an overview of what the European Central Bank does and how it operates. Aggregate probability distribution for the unemployment rate in the longer term. Respondents’ average expectations were for: USD oil prices to remain broadly unchanged until 2021; the euro to appreciate against the dollar until 2021; the ECB’s main refinancing rate to start lifting slightly off the zero lower bound in 2021; and wage growth to take a decreasing path in 2019 and stay on it over the entire forecast horizon. The results for the fourth quarter of 2019 show HICP inflation expectations of 1.2% for 2019 and 2020 and 1.4% for 2021. Discover euro banknotes and their security features and find out more about the euro. HICP inflation expectations for 2019, 2020 and 2021 were revised down to stand at 1.2%, 1.2% and 1.4%, respectively (see Chart 1). Using data from the ECB's Survey of Professional Forecasters, we investigate the reporting practices of survey participants by comparing their point predictions and the mean/median/mode of their probability forecasts. Downloadable (with restrictions)! Read about the ECB’s monetary policy instruments and see the latest data on its open market operations. HICP inflation expectations stand at 1.2%, 1.4% and 1.5% for 2020, 2021 and 2022, respectively. Historically, the frequency distribution of individual point forecasts for longer-term inflation has been concentrated in a tight range (1.8%-2.0% up to 2014 and slightly wider, 1.7%-2.0%, from 2014-18) with the modal forecast being 2.0%. This implies that forecasters now expect prices to be around 5% higher on average than expected in the Q4 2019 survey (see panel (c) of Chart 12). More specifically, they continue to expect a pickup in underlying inflation reflecting higher labour costs. Distribution of point expectations for HICP inflation in the longer term, (x-axis: HICP longer-term inflation expectations, annual percentage changes; y-axis: percentages of respondents). The average point forecast for inflation in the longer-term (2024) remained largely unchanged at 1.7%. Results of the SPF in comparison with other expectations and projections, (annual percentage changes, unless otherwise indicated). See what has changed in our privacy policy, Inflation expectations revised down for the period 2019-21, Longer-term inflation expectations remain at 1.7%, Real GDP growth expectations revised down, particularly for 2020, Unemployment rate expectations revised up, Financial stability and macroprudential policy, Euro area economic and financial developments by institutional sector, Euro area insurance corporation statistics, Euro area financial vehicle corporation statistics, Webcasts: hearings at European Parliament, Meetings of the Governing Council and the General Council, Banking Industry Dialogue on ESCB statistics, Implementation of ESA 2010 in euro area accounts, About the Statistical Data Warehouse (SDW), Selected euro area statistics and national breakdowns, Credit institutions and money market funds, Estimated MFI loans to NFCs by economic activity (NACE), Financial corporations engaged in lending, Long-term interest rate statistics for convergence purposes, Financial integration and structure in the euro area, Balance of payments and other external statistics, Balance of payments and international investment position, International reserves and foreign currency liquidity, Cross-border collateral in Eurosystem credit operations, Payment services, large-value and retail payment systems, Securities trading, clearing and settlement, ECB survey of professional forecasters (SPF), Survey on the access to finance of enterprises (SAFE), Household finance and consumption survey (HFCS), Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD), Emergency liquidity assistance (ELA) and monetary policy, Securities settlement systems and central counterparties, Other infrastructures and service providers, Advisory groups on market infrastructures, Debt Issuance Market Contact Group (DIMCG), European Forum for Innovation in Payments (EFIP), I understand and I accept the use of cookies, See what has changed in our privacy policy. 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