ECB: Eurozone outlook dims with lower spending forecasts

The European Central Bank’s (ECB) reported on Friday a decline in expectations for nominal income and spending growth over the next 12 months.

Median income growth expectations fell to 1.1 per cent in July from 1.4 per cent in June, with the decrease more pronounced among lower-income households.

Similarly, expected spending growth dropped to 3.2 per cent from 3.3 per cent, reaching its lowest level since February 2022.

Economic growth expectations for the next 12 months turned more negative, standing at -1.0 per cent, compared with -0.9 per cent in June, while unemployment expectations remained stable at 10.6 per cent.

The survey also noted a slight dip in anticipated house price growth and stable expectations for mortgage interest rates at 4.8 per cent.

Despite these trends, credit access indicators showed slight improvement, with more households applying for credit, particularly from lower-income groups.

Attribution: The European Central Bank’s (ECB)

Subediting: M. S. Salama