The European Central Bank (ECB) said Thursday that inflation in the eurozone has remained moderate, but that at the same time economic activity is also only growing moderately. In its monthly report for June, the ECB predicted that inflation in the eurozone will "remain contained" and not exceed the central bank's target limit of 2.0 per cent. In May, the rate dropped to 2.0 per cent from 2.1 per cent the previous month, according to DPA. Using wording which matches past monthly bulletins, the ECB said its interest rates were exceptionally low and helping to boost economic activity. "The exceptionally low level of interest rates across the entire maturity spectrum continues to provide considerable support to economic growth in the euro area, which currently shows only moderate dynamics," the ECB said in a preface to its 184-page report. It also cautioned that "most recent indicators for economic activity remain, on balance, on the downside. The moderation in economic activity observed since mid-2004 is partly related to the rise in oil prices." The ECB said that with the global economy expected to remain strong, it will help benefit the eurozone area's exports and also give a boost to investments. "All in all, in the judgement of the Governing Council real economic growth should gradually improve over the period ahead," the ECB said, predicting gross domestic product growth in the eurozone of 1.1 to 1.7 per cent this year and 1.5 to 2.5 per cent in 2006. ---SP 1430 Local Time 1130 GMT
