BRUSSELS (AFX) - European Central Bank vice-president Christian Noyer said the euro zone will see "some effects" from the global economic slowdown, but economic prospects for the area remain good.
"Although the euro area is a large and relatively closed economy, some effects of the slowdown in the global economy will be felt. This can already be seen from the fact that business confidence has deteriorated and industrial production growth has moderated over recent months," Noyer told the European Parliament monetary affairs committee in a presentation of the ECB's annual report.
Noyer said 2001 growth will not be as high as in 2000 because of the weakening of economic activity abroad, but he noted that the euro zone's economic situation is different to that of the U.S. and medium-term prospects for the euro area remain "good overall".
"Available forecasts -- including those of the European Commission, the OECD and the IMF -- suggest that actual growth will be in line with or above the trend potential growth in 2001 and 2002," he said. The ECB defines potential growth as 2.0-2.5 pct.
Noyer said risks to price stability in the euro area have become more balanced since the last increase of ECB interest rates in October, but he added: "They have not entirely disappeared."
Noyer also reiterated that the central bank is "keeping interest rates on hold" at present.
He said euro zone interest rates are "not high historically", neither in nominal nor in real terms.
"Financing conditions in the euro area are therefore conducive to economic growth," he added.