EU cuts eurozone growth forecast to 1.6%

High oil prices and a strong euro will depress economic growth in the euro zone to 1.6 percent this year from 2 percent in 2004, but growth will rebound next year, the European Commission forecast on Monday.

In its twice-yearly forecast the European Union executive said gross domestic product in the 12-nation euro zone would accelerate to 2.1 percent in 2006 thanks to growing domestic demand and investment amid falling inflation and unemployment