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September 3, 2010    

Eurozone growth forecast uplifted

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by Gill Montia
Eurozone growth forecast uplifted

The European Central Bank (ECB) is feeling more optimistic about growth in the eurozone, having raised its forecast for GDP growth to between 1.4% and 1.8% for 2010, and between 0.5% and 2.3% in 2011.

Explaining the revision, ECB president, Jean-Claude Trichet, said: “Euro area real GDP grew strongly on a quarterly basis, increasing by 1.0% in the second quarter of 2010, supported by ongoing growth at the global level but also in part reflecting temporary domestic factors.”

While acknowledging that “uncertainty still prevails” Mr Tricket explained that there is evidence of “a positive underlying momentum of the recovery in the euro area”.

He added: “Ongoing growth at the global level and its impact on the demand for euro area exports, together with the accommodative monetary policy stance and the measures adopted to restore the functioning of the financial system, should continue to support the euro area economy.”

The central bank has kept interest rates on hold at 1%, as expected, but has at the same time raised its forecast for inflation to between 1.5% and 1.7% for 2010, and between 1.2% and 2.2% in 2011.

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