Recovery Process and Inflation Targets in the European Economy

Austrian Central Bank Governor Kocher stated that the European economy has gained stronger momentum than expected since the summer months, expressing their desire to reach the 2 percent inflation target without the need for additional interest rate hikes.

Economic Momentum and Confidence Indicators

In an interview with the Kurier newspaper, Austrian Central Bank Governor Kocher drew attention to the improvements in confidence indicators and the recovery in industry. He emphasized that strong signals have been received showing that the European economy has gained momentum since the summer months.

Interest Rate Policy and Inflation Targets

Stating that the economic situation is still fragile, Kocher said that necessary moves have been made, but unnecessary ones have been avoided. Reminding that interest rate hikes reduce demand, Kocher noted that reaching the 2 percent target without the need for additional increases is preferred.

Future Expectations and Uncertainties

While the ECB has increased borrowing costs twice, markets expect three more hikes in the tightening cycle. Kocher, a hawkish member of the Governing Council, stated that they will reassess the situation at every meeting due to the high uncertainty and price shock caused by the situation in the Middle East.