European Central Bank President Jean- Claude Trichet said this year's surge in oil prices is unlikely to derail an economic recovery among the 12 nations that share the euro. ``I don't think we need to revise our forecast for growth in Europe,'' said Trichet, 61, in an interview on French radio station RTL. ``I maintain our confidence in the continuing gradual pick up that we have seen materializing in the past months in Europe.'' Oil prices have climbed 43 percent this year as demand, particularly from Asia, surged and concerns over supply disruptions from countries including Iraq and Venezuela mounted. The bank in June increased its inflation forecast for this year and next amid the jump in prices.
The bank, which Trichet has headed since November 2003, forecasts inflation of about 2.1 percent and growth of about 1.7 percent in 2004. ``Our diagnosis is unchanged in August from July,'' Trichet said in the radio interview. ``We are confident that prices will fall below 2 percent next year.'' The bank has kept borrowing costs unchanged at 2 percent, the lowest in almost six decades, for the past 13 months, as it waits for Europe's economic recovery to take hold. ///www.bloomberg.com