FX.co ★ Euro Area Inflation Expectations Fall in May

In May 2025, median consumer inflation projections in the Eurozone dipped to 2.8%, marking a three-month low, compared to 3.1% in April. Projections for inflation three years ahead also declined to 2.4% from 2.5%, while the five-year inflation expectations remained steady at 2.1% for the sixth consecutive month. Additionally, uncertainty surrounding inflation expectations lessened, with younger respondents consistently reporting lower inflation perceptions and forecasts compared to their older counterparts. On the income front, consumers anticipated a rise in nominal income growth over the coming 12 months, increasing to 1% from 0.9%. However, anticipated nominal spending growth decreased to 3.5% from 3.7%. Economic growth forecasts for the next year turned less pessimistic, improving to -1.1% in May, up from -1.9% in April. Furthermore, expectations for the unemployment rate 12 months ahead saw a slight decrease, moving to 10.4% from 10.5% in April.