ECB: Consumer Expectations of Inflation Continue to Drop

28 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – The European Central Bank’s consumer expectations survey for May, released Friday, showed inflation expectations at the lowest level since September 2021.

‘Median expectations for inflation over the next 12 months edged down further to 2.8%, from 2.9% in April. They are now at their lowest level since September 2021’, with inflation expectations 3 years ahead down to 2.3% from 2.4% in April, the ECB said.

Perceptions of inflation over the previous 12 months also decreased, according to the survey, while the uncertainty surrounding inflation expectations edged down to the lowest level since February 2022, when Russia invaded Ukraine.

‘Economic growth expectations for the next 12 months remained unchanged at -0.8%. Meanwhile, expectations for the unemployment rate 12 months ahead decreased to 10.7%, from 10.9% in April’, the report said.

The survey showed that consumers’ expectations for nominal income growth decreased to 1.2%, while expectations for nominal spending growth edged down to 5.9% from 6.3% in April.

The ECB reported that consumer expectations for house price increases 12 months ahead remained unchanged at 2.8%.

‘The net percentage of households reporting a tightening (relative to those reporting an easing) in the access to credit over the previous 12 months saw a further decline, as did the net percentage of those expecting a tightening over the next 12 months’, the ECB said.