Three of the euro zone's leading economic research institutes said yesterday that the bloc could expect lacklustre growth in the first nine months of 2004 in a "hesitant" industrial climate with low consumer demand.
In the first set of what will be regular joint forecasts, Germany's Ifo, France's INSEE and Italy's ISAE forecast economic growth of 0.3 per cent in the first quarter of 2004, and 0.4 per cent in the second and third quarters, quarter-on-quarter.
"The industrial climate has become hesitant since January, possibly because of concerns about past exchange rate movements," the institutes said in a joint statement.
"These are not brilliant figures but they are not so bad as to push the European Central Bank to reduce rates when it looks like the federal reserve could increase its rates," Mr Sergio De Nardis, director of macro economic policy research at ISAE, said.
Eurostat confirmed gross domestic product growth for the fourth quarter of last year at 0.3 per cent. It said growth would be 0.3 percent in the first quarter of 2004 and 0.7 in the second.
The institutes said the annual rate of euro-zone inflation was expected to stabilise at 1.7 per cent in the first three quarters of 2004. It was 2 per cent in the final quarter of 2003. Industrial production was expected to be flat in the first half of 2004, before expanding 0.3 per cent in the third quarter.
