BRUSSELS, 29 Nov - The euro zone economy will grow by 2.0 percent in 2005 and 2.4 in 2006, a network of nine leading European forecasting institutes said on Monday.
The Euroframe network, which will from spring 2005 onwards publish reports for the EU Commission, said a further sustained rise in the euro's exchange rate and higher oil prices remain the biggest threat to the euro zone economic prospects.
"Sustained or further currency appreciation along with higher oil prices remain major downward risks to the outlook," Euroframe said in a statement.
The institute said the European Central Bank was likely to keep interest rates unchanged in the first half of 2005 unless higher oil prices started to feed through to wages and inflation.
Euroframe forecast euro zone inflation would average 2.1 percent in 2004, 1.9 percent in 2005, 1.6 percent in 2006.