Professional forecasters raise 2022-24 CPI forecasts, slash that for 2023 GDP, ECB says

Professional forecasters bumped up their outlook for euro area inflation out to 2024 even as they anticipated a technical recession over the next few quarters, the results of a survey conducted by the European Central Bank showed.

According to the ECB's professional forecasters survey, respondents' forecasts for consumer price inflation in the Eurozone now stood at 8.3%, 5.8% and 2.4% for 2022-24.

That was 1.0, 1.2, 0.3 percentage points more than previously anticipated, respectively.

Expected non-oil energy and food prices, pass-through to the rest of the economy and higher wages were to blame for the revisions, they said.

Gross domestic product growth meanwhile was expected to be negative between the third quarter of 2022 and the first of 2023.

Strikingly, forecasts for 2023 GDP growth in the euro area were marked down from 1.5% in the third quarter SPF to 0.1%.

Forecasts were bumped across the forecast horizon, from 6.7% to 6.8% for 2022, from 6.7% to 7.1% for 2023 and from 6.6% to 7.0% for 2024.