Consumer prices rose in 2024 by 3.5 percent, citizens estimated in a European Central Bank (ECB) survey, and according to them, inflation should greatly outpace wage growth in 2025 as well.
Inflation last year, according to the median estimate of citizens, was significantly stronger than the ECB’s forecasts from December showed, establishing that prices in 2024 will rise by 2.4 percent.
In 2025, according to citizens’ estimates, prices will rise by 2.8 percent. The ECB, on the other hand, estimates that it will grow by 2.1 percent on average.
In three years, according to citizens, inflation will drop to 2.4 percent, which means that the ECB will not achieve the set goal of 2 percent price growth.
Nominal wages should increase this year by an average of 1.1 percent, citizens estimate.
According to them, nominal consumption grew by 5.3 percent last year and will increase by 3.5 percent in 2025, according to an ECB survey published on Friday.
According to them, the eurozone economy will shrink by 1.3 percent this year. According to their estimation, the unemployment rate is currently 9.9 percent, and it should rise to 10.5 percent by the end of the year.
Citizens also estimate that the price of their home will increase by 2.9 percent this year, and households with the lowest incomes expect the highest price increase, by 3.5 percent. Citizens also estimate that interest rates on mortgage loans at the end of the year will amount to 4.6 percent, and the poorest households expect the highest, at 5.2 percent.
A net majority of surveyed households stated that their access to loans is difficult, and a net majority expects this trend to continue this year as well, the ECB survey showed.
Banks said in a separate ECB survey that they tightened lending conditions in the fourth quarter of last year, indicating that the trend could continue into the first months of 2025, Hina writes.
