The European Central Bank (ECB) will change its estimates on the euro zone's economy when it publishes its staff's latest forecasts next week, executive board member Lorenzo Bini Smaghi said on Wednesday. "There will be novelties. It is difficult to keep the projections the ECB published in December," Bini Smaghi told reporters on the sidelines of a conference in Florence.
"The assessment is that growth risks are to the downside but inflation risks are on the upside," he added. In December, the ECB's staff forecast the eurozone economy would grow in a 1.5-2.5 percent range this year and inflation in a 2.0-3.0 percent range.
Uncertainty about the outlook is very high, Bini Smaghi said. Arise in commodities prices is "a cause for great concern", partly reflecting a shortage in natural resources, "a phenomenon for which there is no recipe". A central bank source told Reuters earlier this week the ECB would cut its outlook for 2008 gross domestic product growth and may revise its 2008 inflation forecast higher when it publishes updated projections on March 6.