Consumers in the Eurozone expect that prices will rise more than twice as strongly as wages by the end of summer next year, amid a slight decline in economic activity, a survey by the European Central Bank (ECB) showed on Friday.
By the end of summer next year, the annual inflation rate is expected to be 2.7 percent, according to consumers surveyed in July, and will be only slightly lower than during the summer months and at the end of spring.
By the end of summer 2027, it should drop to 2.3 percent, according to the median estimate, which would mean that the ECB, according to citizens’ estimates, will not reach the targeted inflation rate of two percent even in three years.
The ECB estimates that the inflation rate next year will average 2.2 percent and will drop to 1.9 percent in 2026.
In August, prices were calculated to be 2.2 percent higher than last year, according to the European statistical office.
Eurostat is expected to publish the inflation estimate in September early next week.
Nominal wages are expected to rise by 1.2 percent by the end of summer next year, according to citizens’ estimates in the ECB survey, while nominal consumption is expected to increase by 3.2 percent.
The Eurozone economy is expected to shrink by 0.9 percent during the same period, somewhat milder than citizens had previously expected. The unemployment rate is expected to be 7.5 percent, the survey showed.
The ECB survey involved about 19,000 citizens from 11 Eurozone countries, including Belgium, Germany, Spain, France, Italy, the Netherlands, Ireland, Greece, Austria, Portugal, and Finland.
