The euro zone economy is expected to expand by at least 0.2 per cent in the second quarter of 2003, the European Commission said today.
A separate earlier report from the EU statistics office showed the euro zone economy grew at its slowest annual pace in nine years in 2002 after expanding at a quarterly rate of 0.2 per cent in the last quarter of 2002.
The figures came just before the European Central Bank announced a 0.25 per cent per cent cut in interest rates to 2.5 per cent.
A Commission model forecast quarterly change in the euro zone's gross domestic product ranging from a contraction of 0.1 per cent to an expansion of 0.3 per cent in the first quarter.
The second-quarter forecast ranges from 0.2 to 0.5 per cent growth.
"The latter estimate is the result of a relative stabilisation of the indicators used in the model.However, these forecasts are surrounded by an unusual degree of uncertainty related to the war fears in the Middle East," the Commission said in a statement.
"Weak private consumption, contracting activity in the construction sector and a bleak international environment account for this forecast," it said of its model's first-quarter prediction.