Consumer one-year inflation expectations in the Eurozone declined in May, signaling potential easing of price pressures amid steady long-term views.
Eurozone consumers expect inflation to ease to 3.5% over the next year, down from 4.0% in April, according to a European Central Bank survey. The drop suggests cooling near-term price pressures but leaves longer-term expectations unchanged at 2.9% for three years and 2.4% for five years.
The survey, covering 19,000 adults across 11 nations, also revealed improved GDP growth expectations, with a projected contraction of 1.7% over the next year, up from April’s forecast of a 2.2% decline. Despite the shift, ECB policymakers recently raised rates by 25 basis points and signaled further hikes to meet the 2% inflation target.
The data may temper expectations for aggressive monetary tightening, though the ECB remains focused on sustained inflation control. Markets are likely to monitor upcoming policy signals for further guidance.