FRANKFURT (AFX) - Bundesbank president Ernst Welteke said the European Central Bank's monetary policy is no hindrance to growth in the euro zone and added he is "cautiously optimistic" about Germany's growth prospects in the coming months.
"The monetary policy (of the ECB) does not stand in the way of growth", he told the Frankfurter Rundschau newspaper. The ECB has kept rates unchanged since May in the face of demands it should cut rates to stimulate the euro zone economy.
Welteke said growth of 1.7 pct in Germany this year is realistic, even though the forecasts of most independent institutes are significantly lower. He said he is "cautiously optimistic" the German economy will gather pace again in the coming months. Welteke said he sees the first signs of a recovery in the US, while companies in Germany will start to benefit from real long term interest rates being lower than ever before.
He said euro zone inflation will continue to moderate in July and should dip under the 3 pct mark. Although there has been an increase in money supply growth there are "no immediate dangers for price developments here", he added.
However Welteke continued to sound a note of cautions on wage developments. He said the recent settlement agreed by Lufthansa AG and its pilots is the "first signal of a divergence from the currently moderate tariff policy."