FRANKFURT - THE European Central Bank's top economist Juergen Stark thinks the eurozone economy will begin to recover late next year, he said in a press interview.
There are 'arguments in favour of a gradual rebound from the end of next year,' Mr Stark told the regional Germany daily Westdeutsche Allgemeine Zeitung in its Tuesday edition, parts of which were released in advance.
'We will therefore have better forecasts for 2010 than we do now for 2009,' Mr Stark said.
In December, the latest growth estimation by ECB staff forecast that the soon to be 16-nation economy could contract by around 0.5 per cent in 2009 before rebounding a year later with growth of about 1.0 per cent.
Mr Stark also said that 'there are clear indicators at present that the eurozone should not suffer from deflation,' which some fear has inflation falls quickly as a result of the global economic slowdown.
Mr Stark welcomed the fact that 'inflation has dropped so markedly,' and added: 'I am not worried by this correction.' In November, eurozone inflation plummeted to 2.1 per cent from 3.2 per cent the previous month.
In July, it hit a record of 4.0 per cent, and the steep plunge has caused some to worry that the economy could fall into a deflationary cycle, a spiral of falling prices that leads to production cuts and job losses. -- AFP
