FRANKFURT (Reuters – The Euro zone inflation is expected to rise more than anticipated and fall just short of the 2% target for 2022 set by the European Central Bank, according to a survey released Friday by the ECB.

The Survey of Professional Forecasters showed that consumer price growth was now at 2.3% and 1.9%, respectively. This is a significant input to ECB discussions. This compares to the 1.9% and 1.5% respectively in the SPF’s last edition three months back.

According to the ECB, respondents attributed the revisions’ upwards to the higher energy prices as well as the effects of supply chain tensions.

These factors were also mentioned in previous rounds, but the latest developments have been seen to be intenser and more consistent than anticipated.

On the back of soaring commodity and supply bottleneck prices, the inflation rate is expected to rise further to 4%, which would be close to twice what the ECB has set. This will keep pressure on consumer and producer prices.

Although it will fall, many policymakers believe that it will remain above the ECB’s 2% target for 2022. This makes ultra-easy monetary policy less justifiable.

Christine Lagarde of the ECB admitted that while inflation may be temporary, she is abandoning her longstanding stance. She said that consumer price increases will continue to rise for a longer time. That could lead to upward pressure on wages.

However, she said that no intervention was necessary as inflation will still fall below the ECB target after stress in the global economic, mainly due to its reopening following the pandemic.

The inflation rate was 1.9% in the long-term, which is 2026. This is higher than the 1.8% projection.

The projections for growth have been raised from 4.7% to 5.1%, and 2022 growth will be at 4.5%. This is roughly in line with the 4.6% estimate.