ECB: Firms’ Inflation Expectations Down

8 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Euro area firms’ inflation expectations declined in the first quarter of 2024, according to the Survey on the Access to Finance of Enterprises (SAFE) published Monday by the European Central Bank.

The survey found that enterprises’ median expectations for annual inflation in one, three and five years decreased by 0.7, 0.2 and 0.1 percentage points, respectively.

According to the SAFE, which comprised 11,699 enterprises in the euro area, firms’ disagreement about the inflation outlook moderated, as enterprises considered that ‘risks to the inflation outlook in five years were tilted to the upside, rather than the downside’.

The firms surveyed by the ECB reported that financing conditions had tightened further, but ‘much less so than in the fourth quarter of 2023’.

‘Looking ahead, firms have become more optimistic about the availability of bank loans over the next three months’, the survey results said.

‘Fewer enterprises reported an increase in turnover over the last three months, but firms were more optimistic on developments in the next quarter’, the SAFE said, noting that firms expected their selling prices and wages to increase in the next 12 months.