Eurozone institutes see 3.0% growth this year

July 15, 2007 - 0:0

PARIS (AFP) -- Three eurozone economic institutes, Insee in France, Ifo in Germany and the Italian Isae forecast growth of 3.0 percent in the 13-nation area this year, they said in a statement.

The think tanks expected economic growth of about 0.7 percent per quarter, the statement said. It coincided with an estimate by the European Union's Eurostat data service which said that eurozone growth had slowed only slightly in the first quarter to 3.1 percent on an annual basis. On a quarterly comparison, growth in the eight-trillion-euro (11-trillion-dollar) economy eased to 0.7 percent in the first three months of the year after hitting 0.9 percent in the final quarter of 2006, Eurostat said. In their report, the three eurozone economic institutes said: "The persistently positive business climate in the eurozone is pointing to a maintained positive trend for industrial production." They added: "The bright prospects are underpinned by booming investment and, after the temporary setback in the first quarter linked to the German VAT hike, by more buoyant consumption expenditure." If oil prices remained around 70 dollars a barrel for the rest of the year and the euro traded for roughly 1.35 dollars, the think tanks said eurozone inflation "is expected to be 2.0 percent in 2007, in line with the European Central Bank's target for medium-term price stability." Oil prices jumped however on Thursday, breaching 77 dollars per barrel in London and nearing 74 dollars a barrel in New York. The euro traded meanwhile for 1.3776 dollars, its presently strong level providing the eurozone with a bit of relief from rising crude prices