Economists and other experts surveyed by the European Central Bank pared back their predictions on Thursday for inflation to just above zero for this year as oil prices stay low, but expect it will pick up strongly in 2016 and beyond thanks to fresh money printing.

The closely watched Survey of Professional Forecasters upgraded forecasts for economic growth in the coming three years, although economists see only a modest improvement in unemployment in the years to 2017.

The low value of the euro, a trend that is helping exporters, and the roll out of the European Central Bank’s money printing programme known as quantitative easing were credited with the longer-term improvement to inflation, a key measure of economic health.

While the group of experts, economists and academics expected inflation to remain almost stagnant this year, at 0.1 per cent, they forecast a jump in 2016 to 1.2 per cent and further progress over the longer term. Despite this year’s weak reading, they also did not expect it to slip into the red at any stage.

The predictions came a day after ECB president Mario Draghi pledged to roll out the bank's money-printing programme 'firmly', as he painted a slightly more optimistic economic picture, saying that it would strengthen gradually.

The upbeat forecasts of the experts surveyed by the ECB further improves this outlook. It also dovetails with another closely watched poll of banks this week, which showed firms’ appetite for credit was expected to be strongest in over a decade in the coming months.

Mr Draghi, describing speculation that the fledgling €60 billion a month scheme would be scaled back as “surprising”, underlined on Wednesday his determination to see through quantitative easing until September 2016, or until inflation was back up to the bank’s target of close to 2 per cent.

Reuters