|ECB predicts lower euro zone inflation
Euro zone inflation will remain below target in the next few years, and growth will speed up, a survey by the European Central Bank forecast today.
In its regular quarterly survey of professional forecasters, the ECB found that inflation in the 17 countries that share the euro was expected to reach an annual average 1.1 percent this year.
Inflation would then pick up to 1.4 percent in 2015 and 1.7 percent in 2016, the ECB said.
The new forecasts mark a noticeable downward revision from previous predictions.
At the time of its last SPF survey in November, forecasters had been pencilling in inflation of 1.5 percent for this year and 1.6 percent next year.
The ECB defines price stability as inflation rates close to but just below 2 percent.
The respondents in the survey attributed the subdued inflation outlook to “surprises in recent data.''
“More generally, respondents cited lower commodity prices, the appreciation of the euro and weakness in the economic situation and labour markets as factors behind their revisions,'' the ECB explained.
Over the longer term, the rate of inflation could reach 1.9 percent, the survey found.--AP