Results of the ECB Survey of Professional Forecasters for the second quarter of 2022
Forecasters cite war in Ukraine as main factor behind macroeconomic forecast revisions
HICP inflation expectations revised up for 2022 and 2023 but unchanged for 2024 at 1.9%
Longer term inflation expectations revised up from 2.0% to 2.1%
Real GDP growth expectations on balance revised down
Unemployment rate expectations revised down again for all horizons
In the European Central Bank’s (ECB) Survey of Professional Forecasters (SPF) for the second quarter of 2022, respondents revised their inflation expectations for 2022 and 2023 upward, to 6.0% and 2.4% respectively. Expectations for 2024 were unrevised at 1.9%. Regarding the near-term outlook, respondents viewed high inflation as being primarily determined by “cost-push” rather than “demand-pull” factors, and considered that the conflict in Ukraine had re-ignited and amplified price pressures that had started to show signs of peaking. Longer-term inflation expectations for 2026 stood at 2.1%, revised up from 2.0% in the previous survey.
Regarding GDP growth, SPF respondents’ expectations were revised down for 2022 and 2023 and slightly up for 2024, but remained for all years above longer-term growth expectations which edged down marginally to 1.4%. The profile of expected quarter-on-quarter growth in 2022 was revised down in particular for the second quarter (from 1.0% to 0.5%) but while about 25% of respondents who provided a forecast quarterly growth profile saw at least one quarter of negative growth in 2022, only 4% forecasted a technical recession (two consecutive quarters of negative growth).
Notwithstanding the downward revision to expected GDP growth, unemployment rate expectations were revised down further, by between 0.1 and 0.3 percentage points for all horizons. Respondents expect the unemployment rate to decline from 6.9% in 2022 to 6.6% by 2026. Longer-term unemployment expectations are at their lowest level for 15 years.
Table: Results of the ECB Survey of Professional Forecasters for the second quarter of 2022
(annual percentage changes, unless otherwise indicated)
Survey horizon
2022
2023
2024
Longer term(1)
HICP inflation
Q2 2022 SPF
6.0
2.4
1.9
2.1
Previous SPF (Q1 2022)
3.0
1.8
1.9
2.0
HICP inflation excluding energy, food, alcohol and tobacco
Q2 2022 SPF
2.9
2.3
2.0
1.9
Previous SPF (Q1 2022)
2.0
1.8
1.9
1.9
Real GDP growth
Q2 2022 SPF
2.9
2.3
1.8
1.4
Previous SPF (Q1 2022)
4.2
2.7
1.7
1.5
Unemployment rate(2)
Q2 2022 SPF
6.9
6.8
6.7
6.6
Previous SPF (Q1 2022)
7.2
6.9
6.8
6.7
1) Longer-term expectations refer to 2026.
2) As a percentage of the labour force.
Results of the ECB Survey of Professional Forecasters for the fourth quarter of 2021
HICP inflation expectations revised up for all horizons
Real GDP growth expectations largely unchanged
Unemployment rate expectations revised down for all horizons
In the ECB Survey of Professional Forecasters (SPF) for the fourth quarter of 2021, HICP inflation expectations stood at 2.3%, 1.9% and 1.7% for 2021, 2022 and 2023, respectively. Compared with the previous round for the third quarter of 2021, these were revised upward by 0.4 percentage points for 2021 and 2022 and by 0.2 percentage points for 2023. Respondents attributed the upward revisions mainly to higher energy prices and the impact of supply chain tensions. Regarding the near-term outlook, many respondents reported that they expected a further increase in the inflation rate in the final months of 2021 but continue to expect a sharp fall in inflation to below 2% during the course of 2022. Regarding the broader factors influencing the inflation outlook, respondents, on average, believed that underlying inflation pressure would gradually rise in line with the recovery in economic activity. Longer-term inflation expectations for 2026 stood at 1.9%, revised up from 1.8% in the previous round.
Regarding GDP growth, SPF respondents’ expectations were largely unchanged for 2021-2023. The apparent upward revision for 2021 mainly reflects the actual growth outcome in the second quarter, which was stronger than previously expected. Overall, the growth expectations continue to imply that economic activity will surpass its pre-pandemic level (fourth quarter of 2019) in the fourth quarter of 2021. Average longer-term expectations for real GDP growth were revised up slightly to 1.5% from 1.4% in the previous round.
The profile of unemployment has been revised down by between 0.2 and 0.3 percentage points for all horizons. SPF respondents expect the unemployment rate to decline from 7.8% in 2021 to 7.0% by 2026.
Table: Results of the ECB Survey of Professional Forecasters for the fourth quarter of 2021
(annual percentage changes, unless otherwise indicated)
Survey horizon
2021
2022
2023
Longer term (1)
HICP inflation
Q4 2021 SPF
2.3
1.9
1.7
1.9
Previous SPF (Q3 2021)
1.9
1.5
1.5
1.8
HICP inflation excluding energy, food, alcohol and tobacco
Q4 2021 SPF
1.4
1.5
1.6
1.8
Previous SPF (Q3 2021)
1.2
1.3
1.5
1.7
Real GDP growth
Q4 2021 SPF
5.1
4.5
2.2
1.5
Previous SPF (Q3 2021)
4.7
4.6
2.1
1.4
Unemployment rate (2)
Q4 2021 SPF
7.8
7.4
7.2
7.0
Previous SPF (Q3 2021)
8.1
7.8
7.5
7.2
1) Longer-term expectations refer to 2026.
2) As a percentage of the labour force.