Stournaras sees just three rate cuts in 2024 on strong growth

The European Central Bank is “most likely” to cut interest rates just three times this year as stronger-than-expected economic growth supports inflation, Bank of Greece governor and ECB governing council member Yannis Stournaras has said.

The ECB has all but promised to start lowering borrowing costs from their current, record highs in June but the path further ahead has become more uncertain in recent weeks.

Stournaras, a policy dove who was among the first to call for a rate cut in June, said an economic rebound in the first quarter of the year made three cuts more likely than four.

“Based on these data, we now consider the three interest rate cuts in 2024 as the most likely scenario,” the Greek central bank governor told news website Liberal.gr.

“If this pace of economic growth continues, then consumer price growth is likely to be marginally higher than our March forecast, but without jeopardizing the 2% target in mid-2025,” he added.

He added a second cut in July was “possible” and options after the summer remained open. [Reuters]