Eurozone growth, inflation outlook brighter: ECB survey

(FRANKFURT) - The economic skies above Europe are brightening, with both growth and inflation seen moving higher, not least as a result of the European Central Bank's policy measures, an ECB survey showed on Thursday.

Nevertheless, inflation, already chronically low, will be dragged down even further this year by falling oil prices, but should rebound next year, according to the ECB's regular quarterly survey of professional forecasters.

The SPF survey predicted that eurozone inflation would stand at just 0.1 percent in 2015, but rebound to 1.2 percent in 2016 and 1.6 in 2017, moving towards the ECB's target of around 2.0 percent.

The 2015 figure represents a downward revision from the previous survey in the first quarter, but an upward revision for the inflation forecasts for both 2016 and 2017.

"Respondents reported that the downward revision for 2015 mainly reflected lower oil prices, whereas monetary policy measures and exchange rate developments have resulted in upward revisions for 2016 and 2017," the ECB explained.

Already on Wednesday, ECB chief Mario Draghi had said that the central bank's raft of different policy measures, including a much-contested scheme to buy 1.1 trillion euros ($1.2 trillion) worth of public sector and government bonds, were helping to fuel economic recovery.

Turning to the growth outlook for the 19 countries that share the euro, the survey saw an upward revision in experts' growth forecasts.

"Real GDP (gross domestic product) growth expectations were revised up for the short and medium-term horizons, standing at 1.4 percent for 2015, 1.7 percent for 2016 and 1.8 percent for 2017," the ECB said.

"The upward revisions were often explained by the low oil prices, which is expected to contribute positively to private consumption as a result of higher disposable income in households, as well as to company investment as a result of improved margins owing to lower production costs," the ECB said.

In addition the lower exchange rate of the euro is expected to support exports.

The ECB's asset purchase programme was also expected to have an effect, "both via the exchange rate, which many respondents reported as the main channel, and by keeping interest rates low and thus supporting investment," the ECB said.

"Additional beneficial effects are also foreseen in improved market, business and consumer confidence."

The ECB Survey of Professional Forecasters (SPF) collects the views of experts affiliated with financial or non-financial institutions based within the European Union.

While the ECB insists that the survey results do not represent the views of its staff and decision-making bodies, the SPF survey usually provides an indication of where the ECB's own forecasts -- scheduled for release on June 3 -- are headed.

The latest survey was conducted between March 31 and April 7 and there were 59 respondents, the ECB said.