EU Growth Outlook Clouded by Oil, Policy Makers Say

European policy makers meeting for talks in China said record oil prices are dimming the outlook for growth in their region’s beleaguered economy, adding to pressure on the European Central Bank to cut interest rates.

The European Commission may lower its 2005 growth forecast for the third time in eight months if the cost of oil stays at $60 a barrel, European Union Monetary Affairs Commissioner Joaquin Almunia said June 25. German Deputy Finance Minister Caio Koch- Weser warned that growth risks in the second half are skewed “to the downside.”

“In the short-term if the oil price remains around current levels we will have more difficulties reaching our growth forecasts,” Almunia said in an interview in Tianjin, China, where he was attending a meeting of EU and Asian finance ministers.
Bloomberg