Average inflation expectations for 2022 Q4 edged up from 6.5% to 6.6%
Cape Town – The Bureau for Economic Research has announced that average inflation expectations of analysts, business people and trade unions for 2022 edged up from 6.5% in the third quarter of 2022 to 6.6% in the fourth quarter. Expectations for 2023 rose from 5.9% to 6.1% and for 2024 it increased from 5.3% to 5.6%.
Since the previous survey, all social groups revised their forecasts upwards. The magnitude of the upward revision increased from an average of 0.1% pts for 2022 to 0.2% pts for 2023 and 0.3% pts for 2024. The only exception is analysts, who kept their expectation for 2023 unchanged.
Average five-year inflation expectations rose marginally from 5.4% in the third quarter to 5.5% in the fourth quarter. This can be attributed to business people who revised their expectations upwards from 5.6% to 6.1%.
After moderating from 6.5% to 5.8% in the third quarter, household inflation expectations during the next 12 months rebounded to 6.3% in the fourth quarter. Average household inflation expectations over the next 5 years remained unchanged at 8.4% in the fourth quarter.
Beyond 2022, the three social groups have different views on economic growth; analysts expect the economy to continue losing momentum with growth dropping to only 1.1% in 2023, while the other two groups expect growth to be retained relatively close to their 2022 forecasts. On average, growth is expected to decelerate slightly to 2.0% in 2023.
In the case of salary and wage increases, it seems that all three social groups have settled around 6% annually for both 2022 and 2023. None of the groups made any significant revisions to their forecasts compared to the third quarter. Analysts expect wages to increase by 5.7% in 2023, while business people expect a higher rate of 6.1% for 2023.
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