The European Central Bank Thursday raised its growth forecast for 2010 and 2011 and revised slightly upward its projections for inflation in the euro area for two years.
The new forecast of the change in gross domestic product (GDP) Sixteen this year is between 1.4 and 1.8% from 0.7% to 1.3% previously, which gives mid-range a projection of 1.6%, 0.6 percentage points better than the previous estimate in June
For 2011, the forecast has also been revised up, but less sensitive.The new range gives 0.5% to 2.3% growth, or a midpoint of 1.4%, against +0.2% +2.2% (+1.2%) previously.
Last month, the European Commission said he expected growth of 0.9% in 2010 and 1.5% in 2011.
"The range of real GDP growth this year has been revised upward due to stronger than expected rebound in economic growth in the second quarter and better than expected trends observed during the summer months," he said ECB president Jean-Claude Trichet at a press conference.
"For 2011, the band has also been revised up to reflect mainly the lingering effects of the stronger growth expected in late 2010," he added.
The ECB also revised up slightly its forecast for inflation, but even in the new situation it would still be under control in 2010 as in 2011.
Inflation is now expected between 1.5% and 1.7% this year and between 1.2% and 2.2% in 2011. In both cases, higher prices would remain consistent with the ECB target of inflation below but close to 2% of that figure.
The previous range gave +1.4% to +1.6% in 2010 and +1.0% to 2.2% in 2011.