Consumers in the eurozone expect that prices will continue to rise significantly more than wages at the beginning of 2025, according to a new survey by the European Central Bank (ECB) released on Friday.
Inflation is expected to be 3.3 percent in January 2025, as estimated by consumers in the ECB’s survey conducted at the beginning of the year, which means they expect a slightly stronger price increase than at the end of 2023.
The European Statistical Office reported that consumer prices rose by 2.8 percent in January. The ECB estimates that inflation will be 2.7 percent this year and slide to 2.1 percent in 2025. In 2026, price growth is expected to weaken further to 1.9 percent, according to the ECB’s calculations.
Consumers estimate that inflation at the beginning of 2027 will be 2.5 percent, which would mean that the ECB would not achieve its target inflation rate of two percent even in three years.
Nominal wages are expected to rise by 1.2 percent by the beginning of 2025, while nominal consumption is expected to increase by 3.7 percent.
The eurozone economy is expected to shrink by 1.1 percent by the beginning of next year, somewhat milder than previously expected in December. A slightly lower unemployment rate of 10.9 percent is predicted. In December, it was expected to be 11.3 percent.
The ECB’s survey covers 11 eurozone countries, including Belgium, Germany, Spain, France, Italy, the Netherlands, Ireland, Greece, Austria, Portugal, and Finland.
