(Reuters) – Euro zone inflation could fall faster than expected this year as economic growth remains anemic, according to two surveys released on Friday by the European Central Bank (ECB).

Inflation in 2024 could stand at 2.4% on average over the year, compared to 2.7% forecast in the previous survey and 2.7% anticipated by the ECB teams in their latest economic projections, according to an ECB survey of economists.

In 2025, inflation could reach 2.0%, in line with the ECB’s objective, compared to 2.1% previously expected.

This downward revision is consistent with the conclusions of another ECB survey, carried out among companies.

“Responded companies indicated that sales price growth remained moderate in the fourth quarter of 2023, and further easing is expected in the short term,” the ECB said.

The two surveys follow the ECB’s latest monetary policy decision, announced on Thursday.

The survey of economists shows that they expect anemic growth in 2024, with GDP growing by only 0.6% compared to 0.9% previously expected. In 2025, growth is expected to be 1.3%, compared to 1.5% previously.

These increasingly pessimistic outlooks are confirmed by the business survey.

“Businesses continue to expect stagnation or a slight contraction in activity in the fourth quarter of 2023, with little or no recovery expected in the first quarter of 2024,” the ECB said.

Businesses said they expected a slowdown in the jobs market due to continued uncertainty and the growing need to control costs.

In the longer term, until 2028, the survey of economists shows that they expect inflation to be 2.0%, compared to a previous forecast of 2.1%.

(Report by Balazs Koranyi; Corentin Chappron, edited by Blandine Hénault)

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