Consumers in the eurozone expect that wages will grow significantly weaker than consumer prices by the end of 2024, according to a survey conducted by the European Central Bank (ECB) on Tuesday.
Inflation is expected to be 3.2 percent in December 2024, as estimated by consumers in the ECB survey conducted last December. In November, they estimated it would be 3.5 percent.
By the end of 2026, it is expected to drop to 2.5 percent, which would mean that the ECB will not achieve its targeted inflation rate of two percent for almost three years.
Nominal wages are expected to rise by 1.2 percent by the end of 2024, according to consumer forecasts, while nominal consumption is expected to increase by 3.3 percent.
The eurozone economy is expected to shrink by 1.3 percent by the end of the year, with an unemployment rate of 11.2 percent, they estimate.
The latest ECB survey covered 11 eurozone countries, with consumers from Ireland, Greece, Austria, Portugal, and Finland joining those from Belgium, Germany, Spain, France, Italy, and the Netherlands, along with revised results for previous months, notes the ECB.
