VIENNA (Reuters) - The European Central Bank is already hitting its inflation target and should normalise policy as soon as "technically possible" Austrian policymaker Ewald Nowotny said on Friday.
The ECB decided on Thursday to end its 2.6 trillion euro bond purchase programme by year-end but signalled its first rate hike would come later than markets had expected as inflation is rising only slowly and economic growth is softening.
"From my point of view, this objective has been achieved because whether I have 1.7 (percent) or 1.9 (percent), it is within the realm of statistical imprecision," Nowotny told a news conference. "I believe the ECB can say we have successfully achieved our objective."
Such an argument pits Austrian central bank chief Nowotny against ECB President Mario Draghi who has argued that 1.7 percent was not in line with the ECB's objective of inflation at close to but below 2 percent.
Policy hawks often argue that as long as growth remains above potential and the economy continues to absorb spare capacity, inflation pressures will continue to build so a minor deviation from the target is not relevant.
"It is important that the ECB seize the opportunities to normalise monetary policy as soon as it is technically possible," Nowotny said, adding that he fully supported the ECB's policy decisions the day earlier and calling the bank's timeline realistic.
ECB projections forecast inflation at 1.7 percent over the next three years.
Policy doves meanwhile tend to argue that removing central bank support before getting to the target could erode confidence in the bank's ability and willingness to hit its objective.
(Reporting by Francois Murphy; Editing by Balazs Koranyi and Catherine Evans)
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