The Zhitong Finance App learned that European Central Bank Management Committee member and Bank of Austria Governor Martin Kochel said in an interview that the European economy has shown more resilience than expected, which shows that if further tightening of policies is still necessary, the European economy can withstand higher interest rates.

Kochel said, “Fortunately, since the summer, we have seen the European economy send stronger signals, and growth momentum has increased.” He also pointed out that sentiment indicators are improving, and the industrial sector is also recovering.

However, he still stated that “the economic situation is still fragile” and added that “necessary interest rate actions are being taken while avoiding unnecessary adjustments.”

Kochel said, “As I said, interest rate hikes will always dampen aggregate demand, and of course cause pain. Naturally, it would be more ideal if we could meet the 2% inflation target without further interest rate hikes.”

The ECB has raised borrowing costs twice. The market generally expects it to raise interest rates again, and it is expected that it will act three more times during this austerity cycle.

Kochel is generally regarded as one of the hawkish members of the ECB Governing Council, but he has not made a clear statement about his next steps.

“Given the high level of uncertainty and the price impact of the Middle East situation, we will re-evaluate the situation at every meeting,” he said.

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