Euro Area Inflation Expectations Remain Stable

Inflation Expectations in the Euro Area

According to a survey conducted by the European Central Bank (ECB) in November, the inflation rate for the next 12 months is projected to be 2.8%. This figure remains unchanged compared to the forecasts from October.

Long-Term Expectations Remain Unchanged

According to the ECB's data, inflation expectations for 3 years and 5 years remain steady at 2.5% and 2.2% respectively. In December, inflation in the Euro Area showed a slight easing along with a decrease in core pressures, but the ECB's target continues to be at the 2% level.

Service Prices and Wage Increases

Prices in the service sector continue to exhibit a stubborn upward trend due to strong wage increases. Borrowing costs have remained stable since June, while investors and economists do not expect any comprehensive central bank intervention in the near future. Signals from policymakers also indicate that no additional measures are necessary.

Economic Growth and Unemployment Expectations

According to the ECB survey, the Euro Area's 12-month economic growth expectation has been revised down from 1.1% to 1.3%. Additionally, the unemployment rate expectation has decreased from 11% to 10.9%. The nominal income growth expectation remains at 1.2%, consistent with the levels seen in October.