DAVOS, Switzerland — There will be "at least" a few more rate hikes in the next couple of meetings, an ECB member told CNBC Tuesday.
The European Central Bank raised rates four times throughout 2022, bringing its deposit rate to 2%. The central bank in December said it would be increasing rates further in 2023 to address high inflation.
Recent data has shown a slowdown in headline inflation, even if it remains well above the ECB's 2% target. December inflation came in at 9.2% in the euro zone, according to preliminary numbers. This was the second consecutive monthly drop in prices across the euro zone.
"We have and can expect a few more rate hikes in the next couple of meetings at least," Mario Centeno, Governor of the Bank of Portugal, said in Davos.
The ECB's faces a tricky task, with some economists cautioning that a very aggressive hiking cycle could hurt growth.
Speaking to CNBC, Centeno acknowledged that overtightening is the biggest concern for the business community. He reiterated that the ECB will be making its rate decisions on a meeting-by-meeting basis and depending on incoming data.
The latest ECB projections suggest a growth rate of 0.5% for the euro zone in 2023, followed by 1.9% in 2024.
Economists have become more positive on the euro zone outlook in recent weeks. Energy prices have come down, and energy consumption has also been lower than anticipated, combining to a better-than-expected economic performance in the final quarter of 2022.
As such, Centeno also said: "It is likely we will avoid negative growth in the first quarter."
