The euro zone economy may be facing a recession but rate hikes remain absolutely necessary because persistently high inflation is damaging the economy and stability, the Central Bank Governor said today.
Gabriel Makhlouf is also a European Central Bank policymaker.
"The euro area is facing a difficult combination of high inflation and low economic growth, including the possibility of a technical recession," Mr Makhlouf said in Cyprus today.
"History teaches us that these issues will only be exacerbated if we delay action and raising interest rates is absolutely necessary as persistent inflation is damaging to macroeconomic stability," he added.
