Inflation expectations rise sharply
Fri, 11 Apr 2008
CPIX inflation expectations rose sharply in the first quarter of 2008, the Bureau of Economic Research said on Thursday after the release of its quarterly survey.
"During the first quarter of 2008, the largest increase in CPIX inflation expectations between consecutive quarters was registered in the survey's eight year history," the BER said.
CPIX inflation expectations in respect of 2008 increased sharply from 5.9 percent during the last quarter of 2007 to 7.8 percent during the first quarter of 2008.
CPIX inflation expectations of all social groups increased markedly since the previous survey, the BER said.
The expectations of analysts were up by 2.1 percentage points in respect of 2008 and by 0.8 percentage points in respect of 2009.
Business sector expectations were up by 1.8 percentage points in the case of both years.
CPIX inflation expectations of trade unions rose by 1.9 and 1.4 percentage points respectively.
Analysts were the only social group to expect CPIX inflation to decline over the forecast period.
They were also the only group that saw CPIX inflation to be below the six percent upper limit of the central bank's inflation target in 2009 and 2010.
In contrast, business people and trade union leaders expected CPIX inflation to remain unchanged at about 7.5 percent between 2008 and 2010.
They therefore projected CPIX inflation to remain above the upper limit of the inflation target during the subsequent two years, the BER said.
Average headline CPI inflation expectations rose significantly since the survey for the last quarter of 2007.
Headline inflation was expected to average 8.2 percent (previously 6.1 percent) during 2008, 7.1 percent during 2009 and 6.8 percent during 2010.
Household inflation expectations were up considerable from 5.7 percent during the last quarter of 2007 to 8.1 percent during the first quarter of 2008.
The BER said the survey was conducted among financial analysts, business executives and trade union representatives between 21 February and 25 March 2008 and the results were computed on 25 March 2008.
Sapa
