According to analysts at ABN AMRO, the results of the ECB’s Survey of Professional Forecasters (SPF) for 2019Q2 showed that the participants to the SPF lowered their forecasts for growth and inflation in 2019 and 2020 compared to the previous survey.
Key Quotes
“The new SPF forecasts are very close to the ECB’s own staff macroeconomic projections, which were published in March. The SFP participants now expect GDP to grow by 1.2% in 2019 and by 1.5% in 2020 (still above our own forecast of 0.8% and 1.3%, respectively), while the SPF forecasts for inflation now are 1.2% in 2019 and 1.4% in 2020 (also above our own forecasts of 1.2% in each of these years).”
“The SPF’s point forecast for inflation in 2023 remained stable at 1.8% in Q2. However, compared to 2018H2 (1.9%) the forecast has fallen somewhat. Moreover the probability distribution of the forecasts for inflation in 2023 shows that participants attach a somewhat lower probability of inflation being in a range of 0.0-0.5 pps around the target (probability from 58% in 2018H2 to 50% in 2019Q2) and that this decline had mainly shifted towards a higher probability of inflation being significantly below the target (from 28% to 34%).”
“The signs from the SPF are consistent with trends in market inflation expectations. The eurozone 5y5y inflation swap currently stands at 1.35%. This compares to average since 2104 of 1.7% and an average between 2005 and 2013 of 2.4%.”
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