SPF – GDP and inflation outlook revised down

The ECB this morning released the results of the latest survey of professional market observers on economic and market development in the eurozone. According to the Survey of Professional Forecasters (SPF), the economic outlook for the eurozone has deteriorated for this year and the next. Hence, the GDP forecast for 2019 was revised down to 1.5% (1.8%) and for 2020 to 1.5% (1.6%). The participants of this SPF survey for the first time provided a growth forecast for 2021. The market observers expect economic growth momentum to weaken further to 1.4% in this timeframe. Compared with the current ECB staff projections, the SPF survey points towards weaker economic momentum, especially for 2019 and 2020 (see table below).

Inflation rate will persist below the ECB target for the next few years

As regards inflation expectations, the SPF survey suggests that the inflation rate will rise gradually, albeit persisting below the ECB’s target of 2% on a medium-term horizon.

ECB staff projections: downward revision probable at the Council meeting in March

At yesterday’s meeting, the European Central Bank acknowledged that the risks to the growth outlook had increased. The weeks ahead will show to what extent the current weak economic phase merely constitutes a dent or a more lasting slowdown in growth. If the ECB staff projections (GDP and inflation) are revised down at the March Council meeting, the central bank may well adjust its current forward guidance on key ECB interest rate development and shift away from the idea of tackling the turnaround in key interest rates.


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