ECB's Trichet confident of EU economic recoverydespite oil price rise

25th August 2004, Comments 0 comments

PARIS, Aug 25 (AFP) - European Central Bank President Jean-Claude Trichet said Wedensday the bank remained cautious but confident in the economic recovery in the euro zone despite high oil prices.

PARIS, Aug 25 (AFP) - European Central Bank President Jean-Claude Trichet said Wedensday the bank remained cautious but confident in the economic recovery in the euro zone despite high oil prices.

"Everything else being equal elsewhere, the higher price of oil is not good for growth and price increases, but we are not in 1974 nor the beginning of 1980, when we had the big oil shocks," Trichet said in an interview on French radio sation RTL.

"The price increases we are seeing are not as big, and we are better protected against rises in the prices of oil products, especially in France where the nuclear electricity programme has freed us to a large extent from oil," he said.

"Taking everything into account, I don't believe that it's necessary to revise our euro zone growth forecasts lower, and we are in no way calling into question our assessment of confidence in a gradual recovery, which is especially visible in France," he said.

In its monthly report, the ECB said earlier this month it was confident that growth would strengthen in the 12-nation euro zone but expressed concerns about persistent high oil prices, in a monthly report.

Trichet said Wednesday he remained confident that euro zone inflation "is capable of falling back below two percent" next year. Inflation in the euro zone currently stands around 2.4 percent.

In the monthly bulletin, the ECB said inflation risks must be monitored closely in light of continued high oil prices.

© AFP

Subject: French news

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