The European Central Bank (ECB) has predicted economic activity across the euro zone this year will increase.
In its monthly bulletin, the ECB said although production growth in the last quarter of 2001 and the first quarter of 2002 is likely to remain subdued, "recent information has confirmed the expectation of a gradual improvement in economic activity in the course of the year".
It also suggested economic uncertainty, reinforced by the attacks of September 11th, was gradually decreasing.
"Recent survey data released in the euro area indicate that a firming of economic activity should take place [this year]," it said.
Financial markets are also expected to experience a recovery although the timing and strength of the upturn remain uncertain, the bank said.
Regarding consumer price inflation, the bank predicted medium-term inflationary pressures would remain contained although annual inflation rates at the start of this year will be somewhat erratic.
It also said there were indications the introduction of the euro banknotes and coins would strengthen competition and as a result, "barring unforeseen developments, annual inflation rates should decline, due to the unwinding of past increases in energy and food prices".
