Bundesbank´s Weber:ECB to increase Euro growth projections next month

Discussion in 'Wall St. News' started by ASusilovic, Aug 20, 2010.

  1. Weber, 53, said the ECB is likely to raise its euro-region growth forecasts next month after the German economy, Europe’s largest, expanded in the second quarter at the fastest pace since records for a reunified country began in 1991. The Bundesbank yesterday lifted its German growth prediction for 2010 to 3 percent from 1.9 percent.

    ‘Upward Revisions’

    “Since the second quarter outpaced our expectations the euro-area projections too are likely to be revised up as a result of the German performance,” Weber said. The euro-region revisions will be “more modest” than Germany’s because of weaker growth in some peripheral countries, he said.

    The ECB in June predicted euro-area growth of 1 percent this year and 1.2 percent in 2011. Weber said there are no signs of inflation, and indicated the ECB’s key interest rate is likely to remain at a record low of 1 percent for some time.

    “Since inflation risks continue to be low over the policy- relevant medium term, this does not suggest a policy tightening yet,” he said.