Euro zone inflation seen just above ECBs target in 2025, poll shows

Euro zone inflation seen just above ECB's target in 2025, poll shows

FRANKFURT (Reuters) – Euro zone inflation is set to decline to 2.1% in 2025, just a shade above the European Central Banks target, an ECB poll of economists forecast on Friday.

The ECB raised interest rates for the fifth straight time on Thursday and signalled more hikes ahead, reaffirming it would stay the course in the fight against high inflation.

Its Survey of Professional Forecasters, which ECB policymakers use as a key gauge of market expectations, showed economists were expecting the euro zone central bank to eventually conquer inflation – but not before another two years.

Poll respondents put inflation at 5.9% this year and 2.7% the next, a slight increase from the previous survey round in October, the survey showed.

“According to respondents, these changes mainly reflect a combination of recent data outturns, ongoing stronger and broader than expected indirect effects of energy price developments as well as higher forecast wage growth,” the ECB said.

They then expected inflation to fall to 2.1% in 2025, which was not part of the survey in October, and stabilise there in the long term, the survey showed.