In the ECB Survey of Professional Forecasters (SPF) for the first quarter of 2022, HICP inflation expectations stood at 3.0%, 1.8% and 1.9% for 2022, 2023 and 2024 respectively. Compared with the previous round for the fourth quarter of 2021, expectations were revised up by 1.1 percentage points for 2022 and by 0.1 percentage points for 2023 (expectations for 2024 were not surveyed in the previous round). Respondents attributed the upward revisions mainly to further increases in energy prices and the ongoing impact of demand-supply imbalances. At the same time, they continue to expect inflation to fall – to 1.8% by December 2022. Longer-term inflation expectations for 2026 stood at 2.0%, revised up from 1.9% in the previous round.
Regarding GDP growth, SPF respondents’ expectations were largely unchanged, with counteracting revisions for 2022 (downwards) and 2023 (upwards). Based on their profile of expected quarter-on-quarter growth between the fourth quarter of 2021 and the third quarter of 2022, respondents expect the emergence of the Omicron variant of the coronavirus (COVID-19) to result in temporarily slower economic growth in the fourth quarter of 2021 and the first quarter of 2022 but a rebound in the second and third quarters of 2022. Overall, growth expectations continue to imply that economic activity exceeded its pre-pandemic level (fourth quarter of 2019) in the fourth quarter of 2021. Respondents now expect the level of GDP to rise above the path expected before the pandemic in 2023 (compared with 2024 in the previous round). Average longer-term expectations for real GDP growth were unchanged at 1.5%.
Unemployment rate expectations were revised down by between 0.2 and 0.3 percentage points for all horizons. SPF respondents expect the unemployment rate to decline from 7.2% in 2022 to 6.7% by 2026. Longer-term unemployment expectations are at their lowest level for 15 years.