– We did not see the strong reduction in growth rates and the inflationary effects of trade conflicts that were expected in March and April – the governor of the Austrian National Bank said in an interview with POLITICO on Wednesday.
On the same day that a closely watched business survey showed an unexpected and significant increase in activity in October, Kocher suggested there were new signs of economic recovery.
Kocher, who was economy minister before joining the central bank in September, warned against complacency, however.
– I don’t want to embellish what we see. This is the highest level of tariffs since the 1930s and will have consequences for the world economy – he said.
The impact on the eurozone will be extremely difficult to predict because we haven’t seen anything like it in almost 100 years, Kocher said, adding that this is the main reason for the divergent views on the ideal path of monetary policy in the ECB’s Governing Council.
Falling inflation has allowed the ECB to cut its key interest rate eight times since the middle of last year, lowering it from a record high of 4 percent to the current 2 percent – a level the Bank says is no longer constraining the economy.
Kocher, a behavioral rather than monetary economist, is one of the newest faces on the board, having succeeded Robert Holzmann earlier this year. Most analysts expect a more moderate approach from him than from seasoned hawk Holzmann, who has often been the only dissenter on the interest rate-setting body.
(Vijesti.ba / FENA)
