23 January 2003, 13:37  ECB warns on downside risks to eurozone

The European Central Bank (ECB) today said there were still downside risks to the economic outlook for the eurozone, although the low level of interest rates should help to counterbalance them. In its January monthly bulletin, published today, the ECB said the outlook for economic growth remained "broadly unchanged" since early December. "Economic growth is likely to have remained subdued around the turn of the year. A gradual increase in real GDP growth to levels close to potential later in 2003 remains the main scenario, provided that the factors currently contributing to the general climate of uncertainty gradually unwind," it said. Although some stabilisation in financial markets has been observed over the past few months, the ECB said investors continued to perceive a high level of uncertainty. "At the same time, there are still risks relating to a disorderly adjustment of the past accumulation of macroeconomic imbalances outside the euro area. In addition, geopolitical tensions continue to weigh adversely on confidence," the central bank said. ////www.fxcentre.com

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