Inflation Rates Expected to Stay Above Two Per Cent Until the End of 2024

Key facts:

• For 2022, the inflation forecasts average 3.8 per cent.
• Although inflation rates are expected to decline gradually over the next two years, an average price increase of 2.7 per cent is expected for 2023.
• For 2024, the average forecast is 2.3 per cent.
• Long-term inflation: 53 per cent of the participants estimate that inflation rates in the period 2025-2030 will be lower than in the period 2022-2024.
• Inflation drivers: high energy prices, scarcity of raw materials and problems with international supply chains

In line with these inflation forecasts, the ECB’s main refinancing operations rate is expected to increase progressively and steadily over time. The expected 90 per cent mean confidence interval evolves from -0.1 per cent and 0.15 per cent over a six-month period to 0.07 per cent and 0.40 per cent at the end of 2022 before reaching 0.57 per cent and 1.28 per cent at the end of 2024.

The ECB’s main refinancing operations rate is expected to continue to rise in the long run as 66 per cent of the participants estimate that it will be higher in 2025-2030 than in 2022-2024, while 29 per cent anticipate similar levels and only four per cent forecast lower levels.

Source: Survey of financial market experts conducted by ZEW Mannheim, https://www.zew.de