The European central bank's new strategic plan to increase inflation in the european zone failed to convince financial analysts in the European zone's largest economy, Germany. This is based on a survey conducted on Thursday.
The ZEW survey found that the ECB faces challenges in capturing the hearts of analysts and investors especially in Germany which is one of the largest economic zone countries in Europe. This is because analysts and investors are skeptical of the central bank’s easy monetary policy.
The ECB announced its new strategy in early July that promised an increase in price growth and even surpassed the 2% target for some time as interest rates were already close to lows.
The ECB hopes that this new approach will convince investors that they are serious about achieving the set goals.
Yet a ZEW survey showed that a small fraction of 147 analysts at German banks, insurance companies and large industry players voiced disbelief. About 46% of participants said the ECB’s new strategy did not affect their inflation expectations and 5% even reduced their forecasts after the announcement.
In contrast, 49% of respondents said the ECB’s new strategy had a “positive” or “very positive” effect on their projections. Reuters analysts forecast European zone inflation at 1.9% this year, 1.4% next year and 1.5% in 2023.
