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Eurozone inflation outlook brighter, expected to average 0.2%

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Staff writer ▼ | July 18, 2015
The inflation outlook for the euro area is improving as growth picks up and the effects of the European Central Bank's policy measures feed through into the economy, an ECB survey showed.
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ECB survey   A slight upward revision
According to the ECB's regular quarterly survey of professional forecasters, eurozone inflation is expected to average 0.2 percent this year and then pick up to 1.3 percent in 2016 and 1.6 percent in 2017, moving closer to the central bank's target of just under two percent.

The 2015 and 2016 figures represent a slight upward revision from the previous survey in the second quarter.

Survey respondents "see a number of factors that support the strong pick-up in inflation in 2016 and 2017," the ECB said.

"The main factors include the confirmation of ongoing, albeit moderate, growth in economic activity, monetary policy measures, exchange rate developments and base effects from past oil price developments," it explained.

However, respondents expected the pick-up in economic activity to exert only slowly increasing pressure on prices, "as the slack remaining in the euro area economy will be removed only gradually," the ECB continued.

Structural reform efforts and ongoing adjustments and rebalancing in some euro area countries was also expected to help keep a lid on upward price pressures.

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

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