Eurozone: economy expand in 2006 will amplify.[E]

EU economy growth in 2006 will amplify to 2.1% due to favorable credit and monetary policy conditions despite of ECB key rate hike and EUR strengthening as French statistical bureau INSEE expects. Forecasts say that Q2 GDP will make 0,6%, and in Q3 and Q4 - 0,5%. 2005 GDP data made 1,4%. Despite of key rates increase and a rate of euro which was stabilized above $1,27, EU monetary and credit and financial conditions remain rather favorable ", - is spoken in the report. ECB moved on it's borrowing costs on 25 b.p. to 2,75% and hinted on gradual tightening to curb inflation risks in EU on it's meeting 8 June. The key rates hike was still moderated, but their further increase is expected. Monetary policy tightening in EU continues.", -emphasizes. In the report also is also said, that the forecast is based on the assumption, that the rate of euro remains at a level $1,27, the oil is stabilized, and ECB rate will lift according to markets expectations though last factor cannot be guaranteed. Ultimately Eurozone inflation by the end of 2006 will remain 2% thus ECB target is to contain inflation risks nearby this level but in any case above. "The core inflation ex. food and energy will make 1.55 by the end of current year. At the same time, occurrence of secondary inflation lead by

oil gains seems very improbable". EU Unemployment by the end of year will fall to 7,8 %, and in case of

with Germany, 2006 should become year when losses of workplaces will end".