ECB Survey Reflects Optimism About The European Economy

The bank’s Survey of Professional Forecasters showed on Friday showed on Friday that the Eurozone economy may contract this year less than what the European Central Bank (ECB) expected and may recover faster.

The quarterly survey sees the economy shrinking by 8.3% this year, a downgrade from its May projection for a 5.5% drop but a more benign outcome than the ECB staff’s own estimate for an 8.7% drop. For next year, growth is seen at 5.7%, above the ECB’s staff’s 5.2% estimate in June.

The survey was more optimistic about inflation, sees 2020 price growth of 0.4% against the expectations of the ECB 0.3%, while sees 2021 inflation at 1% against the expectations of the European Central Bank of 0.8%.

The long-term growth forecast remained unchanged at 1.4% but lowered the long-term inflation expectations to 1.6% from 1.7% below the ECB target of less than 2%.