2024 GDP forecast inches up, 2025 tweaked lower (Il Sole 24 Ore Radiocor) - Frankfurt, 19 Jul - Eurozone inflation should hit the European Central Bank 2.0% target in 2025, falling from 2.4% this year and dipping further to 1.9% in 2026, according to the latest Survey of Professional Forecasters (SPF) published by the European Central Bank for the third quarter.

Compared with the previous survey, 2024 and 2025 expectations were unchanged while that for 2026 was revised marginally down from a previous 2.0%. Longer-term inflation expectations are unchanged at 2.0%.

Expectations for core HICP inflation, which excludes energy and food, were revised upwards slightly for 2024 to 2.7%, from 2.6%, and for 2025 to 2.2%, from 2.1%, reflecting data outturns and more persistent than expected services inflation and labour cost growth. Longer-term expectations for headline and core HICP inflation were unchanged at 2.0%.

Gross domestic product is expected to grow 0.7% this year, from a previous 0.5%, 1.3% in 2025, revised from 1.4%, and was confirmed at 1.4% in 2026.

The upward revision for 2024 largely reflects a stronger than expected outcome for the first quarter of 2024, with the profile thereafter largely unchanged. Longer-term growth expectations remained unchanged at 1.3%.

Forecasts for the jobless rate were tweaked to 6.5% in both 2024 and 2025 from a previous 6.6%, dipping to 6.4% in 2026, revised from 6.5%, where it is seen staying also longer term.

Forecasters expect nominal wages to increase by 4.5% in 2024, with wage growth subsequently moderating to 3.4% in 2025, 2.9% in 2026, and 2.7% in the longer term.

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(RADIOCOR) 19-07-24 10:48:02 (0204) 5 NNNN