FRANKFURT (AFP) -- A regular poll by the European Central Bank showed that economic experts have upgraded slightly their forecasts for growth in the eurozone economy this year and next year.

But with area-wide inflation projected to remain close to the ECB's ceiling of 2.0 percent in 2007 and 2008, the survey provided no immediate clues as to whether the guardian of the euro needed to raise its key interest rates beyond a widely anticipated rate hike next month.

In its February monthly bulletin, the ECB said that in its regular quarterly "Survey of Professional Forecasters" the experts had revised upwards their growth forecast for 2007 to 2.1 percent from 2.0 percent previously.

And area-wide inflation was forecast to average 2.0 percent in this year.

The guardian of the euro defines price stability as consumer price increases of close to but just below 2.0 percent on a 12-month basis.

Looking ahead to next year, the eurozone economy was expected to grow by 2.1 percent again in 2008, while inflation would come down slightly to 1.9 percent, the ECB poll showed.

The upward revisions in the growth forecasts "mainly reflects improved expectations for domestic demand (in particular private consumption and investment) and for external demand," the ECB wrote.

"In both years, the risks surrounding the forecasts are assessed to be more on the downside, mostly related to oil prices and global imbalances," it added.

On the inflation front, the downward revision in the forecast for this year "largely reflects the recent fall in oil prices and generally lower oil price assumptions," the ECB wrote.

"Inflation is, however, expected to be affected by the German VAT (value-added or sales tax) increase in January," which the experts estimated would, on average, add 0.3 percentage point to annual euro area inflation in 2007, it continued.

VAT in Germany was increased by three full percentage points this year to 19 percent.

The growth and inflation outlook appears to provide no clear clue as to whether further increases in interest rates are needed in the 13 countries that share the euro after a widely anticipated rate hike next month.

The guardian of the euro has raised eurozone borrowing costs six times since December 2005, each time by a quarter of a percentage point.

The last upward move in ECB interest rates was in December and central bank watchers are betting on a further tightening move next month, bringing the benchmark "refi" refinancing rate to 3.75 percent.

In the editorial to its February monthly bulletin, the ECB reinforced the strong signal that a rate hike was on the cards in March. The bank said that "strong vigilance remains of the essence so as to ensure that risks to price stability over the medium term do not materialize."

The use of the term "strong vigilance" is widely seen as the ECB's code-word for preparing the markets for a rate hike the following month.

With borrowing costs at 3.50 percent, "the ECB's monetary policy remains accommodative," the bank said.

"Interest rates are still at low levels, money and credit growth remain vigorous and liquidity is ample by all plausible measures. Therefore, looking ahead, acting in a firm and timely manner to ensure price stability in the medium term remains warranted," it said.

But ECB watchers are divided about whether additional monetary tightening is necessary later this year.