Results of the BER Inflation Expectation Survey – Second Quarter of 2008

During the second quarter of 2008, CPIX inflation expectations in respect of all forecast years increased further relative to the first quarter. They increased from 7.8% to 8.9% in respect of 2008, from 7.0% to 7.9% in respect of 2009 and from 6.7% to 7.2% in respect of 2010.

Of the three social groups, analysts revised their forecasts upwards by the biggest margin. They were followed by the business sector. The trade union movement made the smallest up-ward revision. In actual fact, they made no change to their 2010 forecast.

All social groups expect CPIX inflation to decline over the forecast period. This finding stands in contrast to that of 08Q1, when business people and trade union leaders forecast no change in CPIX inflation over the forecast period. Analysts now expect a 3.8 percentage point decline (from 9.6% to 5.8%), trade union leaders a 1.0 percentage point decline (from 8.4% to 7.4%) and business people a 0.5 percentage point decline (from 8.8% to 8.3%) in CPIX inflation between 2008 and 2010.

Only analysts foresee CPIX inflation to be within the target range and then only by 2010. In the 08Q1 survey, analysts still forecast CPIX inflation to be below 6% in both 2009 and 2010.

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