Euro zone economic growth will speed up slightly in the second quarter from the previous two quarters, the European Commission said today.
The commission expects growth in the 12 countries using the euro will be 0.4 to 0.9 per cent between April and June against an estimated 0.4 to 0.8 per cent range in the previous two quarters.
Separately, the EU's statistics office confirmed an earlier estimate that GDP in the 12 countries grew by 0.6 per cent in the third quarter of 2005 compared with the previous three-month period.
That gave a year-on-year rise of 1.6 per cent, Eurostat. The 0.6 per cent growth in the July-September period was an acceleration from 0.4 per cent quarterly expansion in the second quarter and a 0.3 per cent rise in the first three months of 2005, confirming a gradual speeding up of economic activity.
This is likely to strengthen the case for more interest rate rises by the European Central Bank, economists said.
Economists expect the ECB to raise interest rates to stem inflationary pressures as the euro zone economy accelerates, building on a December 1st hike of 25 basis points to 2.25 per cent.
The bank left interest rates unchanged yesterday but sounded a slightly more hawkish tone as it predicted the economy would continue to strengthen despite downside risks.