Survey Shows Eurozone Inflation Below Target for Some Time to Come

 
   By Todd Buell 
 

        FRANKFURT--Forecasters polled by the European Central Bank only slightly raised their inflation outlook for this year and next year, a report published by the central bank showed on Friday.
        The predictions signal continued weakness on the inflation front and likely underscore the need for the ECB to continue with its quantitative easing program in an effort to push inflation closer to the ECB's target of just below 2%.
        The Survey of Professional Forecasters now sees inflation in the currency bloc at 0.2% this year, a 0.1 percentage point upward revision from the previous forecast in April. The SPF sees inflation at 1.3% next year, versus 1.2% seen in April, and 1.6% in 2017, matching the previous forecast.
        The report said the "main factors" for the expected rise in inflation in 2016 and 2017 were "the confirmation of ongoing, albeit moderate, growth in economic activity, monetary policy measures, exchange rate developments and base effects from past oil price developments."
        The longer-term outlook showed inflation expectations only marginally increasing to 1.86% versus 1.84% in the previous round.
        The SPF's inflation outlook is lower than the forecast issued by the ECB's staff in June, which saw inflation this year at 0.3%, 1.5% next year and 1.8% in 2017.
        In March, the ECB launched a EUR60 billion per month broad-based asset purchase plan, known as quantitative easing, designed to combat the risk of deflation in the currency bloc.
        ECB President Mario Draghi repeated Thursday that the ECB intends to carry out that program until Sept. 2016 "and, in any case, until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term."
        Write to Todd Buell at Todd.Buell@wsj.com
        (END) Dow Jones Newswires

        July 17, 2015 04:00 ET (08:00 GMT)

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