ECB’s Kocher: More Clarity About 2026 and 2027 “Much More Important” Than 2028 Forecast

3 November 2025

By David Barwick – VIENNA (Econostream) – European Central Bank Governing Council member Martin Kocher on Monday said that though the ECB's initial 2028 macroeconomic forecast due in December would be of interest, its importance was much less than that of the corresponding projections for next year and the year after.

Speaking to media at the Austrian National Bank, which he heads, Kocher said the ECB would reach its December monetary policy decision “on the basis of the data.”

“There is no pre-commitment as far as interest rates are concerned,” he said. It was completely unclear what would happen to rates next and when, he said.

With respect to the updated projections expected in December, “2028 will be interesting,” he said. However, he added, “that is a difficult projection,” being so far in the future.

“It’s much more important that we have somewhat more clarity about 2026 and 2027,” he said.

As for views within the Council on the need to ease further, “there are naturally different opinions,” he said. However, policymakers were currently “not so far apart from each other.”

“It’s no secret that there are a few members of the ECB Governing Council who could imagine another rate cut,” he said. However, no one currently saw a need for a further series of cuts, he said.

Interest rates were now in neutral territory and further easing “would not compensate for the structural challenges” facing Europe, he said.

Fine-tuning monetary policy in constant pursuit of exactly 2% every month would be “over-engineering” and the result would be extreme volatility, he said.

Since the middle of the year, there had been “a relatively stable evolution of inflation in the euro area,” he said. Meanwhile, “over the last months, the projections haven’t changed, and risks have tended to improve,” he said, justifying the ECB’s current steady-hand approach.

“We actually saw a slightly better trend in the economic data everywhere,” as the frontloading seen earlier in the year did not lead to the expected reversal, he said.

The somewhat better economic developments were “something that should produce additional optimism,” he said, though he conceded that the outlook for growth was still “not very dynamic.”

As for inflation, the euro area was currently “practically at the 2% target, and the prospects for the next months are that inflation will move around in this region,” he said.

Inflation expectations were relatively stable, which was “decisive,” he said. Much of current inflation could be attributed to the services sector, where price developments “warrant attention,” he said.

Overall, the ECB was in a “comfortable data situation,” though this was subject to change at any time, he said. Risks hadn’t worsened lately, “but the risks are still there,” he said. These constituted “a series of factors that will influence our projections in the next months and years,” he said.