Investors expected as many as five rate cuts from the ECB this year but dialled back those bets since the turn of the year, primarily because they are also seeing fewer cuts from the U.S. Federal Reserve.

"There has been a repricing recently from four to five (rate cuts this year) to three to four cuts and I think it's reasonable," Vujcic told a webinar with LC Macro Advisors. "I don't feel uncomfortable with the current market pricing."

"Markets have to make these predictions, we don't. We can always wait for the data and then decide," Vujcic, a member of the ECB's Governing Council, said.

Investors have fully priced a cut in the 3% deposit rate on Jan. 30 and see the benchmark down at 2% by the end of the year.

Economic data since the ECB's last policy meeting in mid-December have been broadly in line with expectations, bolstering the credibility of projections and indicating that the current policy stance remains appropriate, Vujcic added.

Inflation, at 2.4% in December, is expected to ease back to the ECB's 2% target by around mid-year and a key reason for easing price pressures is the weak economic outlook.

Vujcic argued that the ECB had managed to engineer a so-called soft landing, or taming inflation without causing a recession, but there was no significant upturn in growth in sight, raising the risk of economic stagnation.

Industry has been in recession, government investment is weak and private consumption has been especially low as households bolster their savings. A rise in foreign trade income has been among the few bright spots but even that came because of lower imports and not due to higher exports.