STRASBOURG, France (AFP) - European Central Bank president Jean-Claude Trichet said the eurozone economy was likely to continue growing at its current pace, but noted that high oil prices could dampen the speed of the recovery.
Trichet told the European Parliament that eurozone gross domestic product (GDP) in the second quarter grew by 2.0 percent from a year earlier and quarterly growth rates since mid-2003 had been between 0.4 and 0.7 percent, so growth has been close to its potential rate over the past 12 months.
The ECB puts the 12-state eurozone's potential GDP growth rate at 2.0-2.5 percent.
"We expect a continuation of this growth trend in the coming quarters," he said.
But he said oil prices could dampen the pace of the recovery.
"If oil prices were to remain high, or even to increase further, they could dampen the strength of the recovery, both inside and outside the euro area," he said.
Oil prices surged to new record highs Monday, hitting a peak of 55.67 dollars a barrel in New York while Brent crude reached an all-time high 51.90 dollars in London on concerns about tight supplies of heating fuel and an oil-sector strike in Norway, the third-largest crude exporter after Saudi Arabia and Russia.
Trichet said that inflation remained under control for the moment.
"The available information does not indicate that stronger underlying inflationary pressures are building up domestically as yet," he said.
10/25/2004 - 17:50 GMT - AFP