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European consumers' inflation expectations decline in Dec 2023: ECB

06 Feb '24
2 min read
Pic: Adobe Stock
Pic: Adobe Stock

Insights

  • European consumers' median perceived inflation over the past year decreased to 6.9 per cent in December from 7.6 per cent in November.
  • Expectations for one-year inflation fell to 3.2 per cent, the lowest since February 2022, while three-year expectations slightly increased to 2.5 per cent.
  • Income growth expectations remained at 1.2 per cent.
European consumers' median rate of perceived inflation over the past year has seen a further decrease, moving to 6.9 per cent in December 2023 from 7.6 per cent in November, according to the latest findings from the European Central Bank (ECB) Consumer Expectations Survey (CES). Notably, expectations for inflation over the coming year have also dropped to 3.2 per cent from 3.5 per cent, marking the lowest level of one-year inflation expectations since February 2022.

However, the survey also highlighted a slight uptick in the median inflation expectations for three years ahead, which edged up to 2.5 per cent from 2.4 per cent. Despite these fluctuations, uncertainty regarding inflation expectations for the next year has remained steady.

The survey revealed a consistent pattern across different income groups, with inflation perceptions and expectations being somewhat higher among the lower income quintiles. Age also played a role in these perceptions, with younger respondents (aged 18-34) generally reporting lower inflation perceptions and expectations compared to older groups (aged 35-54 and 55-70).

On the income and consumption front, the survey found that consumer expectations for nominal income growth have held steady at 1.2 per cent. Meanwhile, perceptions of nominal spending growth over the past year have slightly decreased to 6.8 per cent from 6.9 per cent in November. Expectations for nominal spending growth over the next year remain unchanged at 3.6 per cent.

Regarding the labour market and economic growth, expectations for economic growth over the next 12 months have stayed constant at minus 1.3 per cent. Conversely, expectations for the unemployment rate 12 months ahead have seen a minor decline, dropping to 11.2 per cent from 11.4 per cent in November.

Fibre2Fashion News Desk (DP)

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