EU says euro zone 2007 growth outlook is 'favourable', risks are balanced |
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Thu, 29 Mar 2007 11:06
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BRUSSELS (AFX) - The European Commission said the euro zone's growth outlook for this year is still 'favourable', with risks balanced.In its latest quarterly euro zone report, the commission noted that the bloc posted 2.6 pct growth last year, the strongest rate since 2000 and well above its potential level of 2.0-2.25 pct.'Prospects for 2007 remain favourable,' it said.'Looking ahead, risks appear very balanced,' it said.The commission is forecasting growth of 2.4 pct this year, but warned that 'in the longer run, prospects could diminish, due to some looming risks in the external environment'.It cited the threat of sluggish growth in the US, any strengthening of the euro, oil price rises, and a disorderly unwinding of global imbalances.'Moreover, the recent equity market turbulence is indicative of heightened financial market uncertainties,' it said.'It is too early to tell whether this relfects a mere technical correction or the beginning of a more sustained period of weakness,' it said.The commission cautioned that wage agreements should be in line with productivity.victoria.main@afxnews.comvm/cmrCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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