Trichet says euro zone growth slightly above potential rate UPDATE |
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Published
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Thu, 29 Mar 2007 15:00
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(updating with comments on Spain's productivity performance)MADRID (AFX) - European Central Bank president Jean-Claude Trichet said euro zone growth is running slightly above its potential rate.Trichet told a conference that the rate of growth in the euro zone is encouraging, but he added: 'Growth is probably slightly above its potential rate.'The ECB puts the euro zone's potential growth rate -- the maximum growth rate which the economy can sustain over the long term without generating inflationary pressures -- at around 2.0 pct annually, equivalent to a quarter-on-quarter growth rate of 0.5 pct.Euro zone GDP grew 0.9 pct in the fourth quarter of last year but economists expect growth to slow from this pace in the first quarter.Trichet also expressed concern about Spain's productivity performance which he described as 'totally unsatisfactory'.EU statistics office Eurostat estimates that output per hour worked in Spain is only 87.3 pct of the euro zone average and that its productivity has actually deteriorated over the past ten years in comparison with its euro zone partners.Spanish Finance Minister Pedro Solbes has repeatedly warned that Spain needs to boost its productivity if it is to maintain the strong pace of GDP growth seen in recent years.steve.whitehouse@thomson.comafp/sw/cmr/sw/cmlCOPYRIGHTCopyright 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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Trichet says euro zone growth slightly above potential rate 