In the latest ECB survey for Q2, professional forecasters revised down growth, inflation and core inflation forecasts for both 2019 and 2020. Inflation are projected to be below ECB’s 2% target over the whole forecast horizon. Also, the reported noted that “probability distributions continued to indicate relatively high uncertainty around expected inflation in two years’ time.”
On growth, “respondents considered the current level of uncertainty to be very high and to be having an economic impact, mainly via companies’ investment decisions.” Also “risks to the forecasts for real GDP growth remained to the downside.” The most cited downside risks was “potential impact of a hard Brexit. Many respondents refer to “further escalation of trade conflict between US and China, an the apparent slowdown in China”. “Very few”mentioned upside risks.
HICP inflation forecasts (previous at Q1 2019):
- 2019 at 1.4% (down from 1.5%)
- 2020 at 1.5% (down from 1.6%)
- 2021 at 1.6% (down from 1.7%)
- Longer term at 1.8% (unchanged)
HICP core inflation forecast:
- 2019 at 1.2% (down from 1.3%)
- 2020 at 1.4% (down from 1.5%)
- 2021 at 1.6% (unchanged)
- Longer term at 1.7% (unchanged)
GDP growth forecast:
- 2019 at 1.2% (down from 1.5%)
- 2020 at 1.4% (down from 1.5%)
- 2021 at 1.4% (unchanged)
- Longer term at 1.4% (down from 1.5%).
