FRANKFURT (Reuters) – Euro zone consumers lowered their expectation for inflation over the next 12 months in March but continued to see price growth above the European Central Bank’s 2% target further out, the ECB’s Consumer Expectations Survey showed on Friday.
Inflation has fallen quickly over the past year and the ECB is planning to cut interest rates in June but the outlook further out remains clouded by rising energy costs, stubbornly high services inflation and continued geopolitical tensions that threaten to disrupt trade.
Euro zone consumers saw inflation in the next 12 months at 3.0%, a tad below the 3.1% expected a month earlier, the ECB said. It was survey’s lowest reading since December 2021.
Meanwhile, inflation expectations for three years ahead held steady for a fourth consecutive month at 2.5%, the ECB said in its monthly survey of around 19,000 consumers.
Expectations for income and spending growth both declined moderately, even as unemployment was seen lower than a month earlier.
Still, consumers continued to expect negative economic growth for the next year with GDP seen contracting by 1.1%.
(Reporting by Balazs Koranyi; editing by Christina Fincher)
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