Eurozone finance ministers are likely to send an upbeat message on the rebounding economy when they meet on Friday and Saturday in Helsinki, unruffled by some data indicating that growth has peaked.
The European Commission followed the European Central Bank on Wednesday in raising its 2006 economic growth forecast for the 12 countries using the euro to 2.5 percent from 2.1 percent and said it may also boost the 2007 estimate later.
The ECB upped its growth projection for next year to 2.1 percent from 1.8 percent last week. Euro zone ministers will discuss the Commission and central bank estimates.
"The ministers are extremely upbeat on GDP growth - the real sector, the financial sector, it's boring because it's so positive," a source close to the meeting preparations told Reuters.
Most economists say sentiment indicators already show that growth in the eurozone peaked with a 0.9 percent quarterly expansion in the second quarter, which followed an also above-trend 0.8 percent rise in the first three months.
The Commission expects the eurozone to grow by 0.7 percent on a quarterly basis in the July-September period and another 0.7 percent in the last three months of the year, before slowing further in the first quarter of 2007. "A slight slowdown is possible, but coming from such a high level that it cannot worry anybody," the source said.
Finance ministers from Germany, France and Austria nevertheless called on the ECB on Monday to go slow with further rises in interest rates so as not to harm growth.
Markets expect the ECB, which wants to keep inflation just below 2 percent, to increase rates by 25 basis points to 3.25 percent on October 5 and maybe once more to 3.5 percent in December to stem inflationary pressure.
The Commission and the ECB raised their 2006 inflation forecasts to 2.3 and 2.4 percent respectively and the bank expects price growth of 2.4 percent, up from the previously forecast 2.2 percent, next year as well.
ECB President Jean-Claude Trichet will explain the bank's view on the economy to the ministers on Friday morning, but another source close to the preparations said they were unlikely to pressure him to hold back the expected rate rises.
"Everybody knows where we are heading and everybody has resigned themselves that this will happen, that the recent data is not sufficiently hard evidence to dissuade the bank from remaining on the expected course," the second source said. "Pressure on the ECB ... is totally counterproductive, so we will leave it at that," the source said.
The faster growth has boosted the budget revenues of all big eurozone economies, likely helping Germany to beat an EU 2007 deadline by bringing its budget deficit below the bloc's ceiling of 3 percent of gross domestic product already this year.
The ministers will therefore back the Commission's July assessment that the eurozone's biggest economy was on track to correct the deficit as asked, while noting that deficit-cutting efforts should continue further.
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