Economists See Oil, Rate Increases Hurting Euro-Zone Growth

ByBridgeNews High fossil fuel prices and the continuing effect of successive rate increases by the European Central Bank (ECB) will act in tandem to slow economic expansion both in the euro zone and its largest national economy, Germany, the six leading economic think tanks said in their autumn outlook. Collective economic growth in the euro zone should reach 3.3% this year in terms adjusted for inflation, the institutes said. Next year's collective GDP growth should decline to 2.8%. Euro-zone consumer inflation at 2.3% in average annual terms this year should decline to 2.1% in 2001, near the ECB inflation target cap of 2%. German GDP will continue to lag behind the euro-zone average, according to the institutes, which placed expected real GDP expansion this year at 3.0% and 2.7% in 2001.