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Euro zone to grow at 3%
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July 5, 2000: 7:22 a.m. ET
ECB chief sees above-average growth; economic outlook 'best for 25 years'
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LONDON (CNNfn) - European Central Bank President Wim Duisenberg said on Wednesday he expects growth in the euro zone to exceed 3 percent a year, although a quickening of inflation "is not on the cards" just yet.
It amounts to the best economic outlook for the euro-currency zone for 25 years, Duisenberg said in answers to questions in a debate in the European
Parliament. Six interest-rate hikes since April 1999 have kept inflation in check, meaning the rate of price rises should remain below the central bank's 2 percent-a-year ceiling in the coming months, although "upside risks" existed.
"In the past 25 years the average growth rate of euro area gross domestic product has been between 2 and 2-1/2 percent," Duisenberg said. "We are now in for a period this year and next year when growth will be in excess, I would even say considerably in excess, of 3 percent a year."
The euro rose to 95.64 U.S. cents, up half a cent from Tuesday's close. It rallied against the yen to touch highs around ¥101.60, up about a yen on the day.
Duisenberg said so far there was no evidence of a "new economy" in the euro zone and an easy monetary policy to support its emergence was not an option.
"There is some evidence -- although not uncontroversial itself -- of the emergence of a new economy in the United States. By contrast it is difficult as yet to find clear evidence of a new economy in the euro area," Duisenberg told the European Parliament.
Duisenberg defined the new economy as a phase in which there is an increased growth rate in productivity over an extended period of time.
"An inappropriately lax monetary policy would not create better conditions for the emergence of a new economy" and could jeopardize price stability, Duisenberg said. 
--from staff and wire reports
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European Central Bank
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