The euro zone economy grew at a quarterly rate of 0.4 per cent in the fourth quarter of 2004 and will maintain the same growth rate in the first two quarters of 2005, three of the bloc's top think tanks said yesterday.
"This only moderate growth pace is ... confirmed by the end of the improvement in the Ifo-INSEE-ISAE business surveys over the past months," the three institutes said in a joint report.
The joint forecast for the fourth quarter of 2004 from Germany's Ifo, France's INSEE and Italy's ISAE is a slight downward revision from their previous forecast in October of growth of 0.5 per cent.
The report contained no forecast for full year 2005 growth, but Mr Sergio De Nardis, the economist responsible for ISAE's input to the forecasting exercise, said the outlook is not encouraging.
"The numbers point to no recovery this year," Mr De Nardis said.
"Growth in 2005 is unlikely to be stronger than in 2004 and may even be a shade weaker, it'll be around 1.8 or 1.7 per cent."
Analysts said the institutes' forecasts contained few surprises and offered no reason for the European Central Bank to raise interest rates in the near future from their current low of 2 per cent.
