The average consumer price index (CPI) inflation expectations for 2018 remain unchanged at 5.8% in the third quarter, according to the Bureau for Economic Research (BER).
The bureau’s Inflation Expectations Survey shows that analysts and businesspeople have lowered their forecasts; however, trade unions revised their projections upwards since the previous survey.
The BER quarterly survey shows analysts expecting a slide from 5.3% in 2017 to 5% in 2018, before accelerating to 5.3% in 2019, lower than previous forecasts of 5.4%, 5.1% and 5.5% respectively.
Businesspeople expect inflation to be 6.1% in 2017 and 2018, down from the prior projections of 6.3% this year and 6.4% next year, while forecasting an acceleration in 2019 to 6.3%, down from the previous forecast of 6.5%.
Trade unions, meanwhile, lowered their 2017 forecast from 6.% to 5.8%, but increased their 2018 and 2019 projections from 5.9% to 6.1% and 6% respectively.
“All three social groups lowered their five-year inflation expectations – analysts from 5.5% to 5.4%, businesspeople from 6.3% to 6%, and trade unions from 5.8% to 5.5%. Average five-year expectations declined from 5.9% to 5.6%, which is the lowest level since the third quarter of 2011, when it was surveyed for the first time,” BER said on Thursday.
Meanwhile, the survey showed that respondents maintained expectations of 0.5% economic growth in 2017 and 1% in 2018, compared with 0.4% and 0.9% in the prior survey.
“In terms of salary and wage increases, in the third quarter all the social groups adjusted their forecasts slightly downwards relative to the second quarter,” the survey showed.
On average, wages are expected to increase by between 6.1% and 6.4% in both 2017 and 2018. The only exception is the 2018 forecast of trade unions at 7%.