STRASBOURG, July 4: European Central Bank President Jean-Claude Trichet expressed concern on Monday that a fresh rise in oil prices might hurt the outlook for euro zone economic growth. In a statement prepared for the European Parliament, Trichet repeated the ECB view that economic growth would gradually pick up, as reflected by the bank’s staff forecasts last month.

“However, uncertainties surrounding the short-term evolution of domestic demand have heightened. Notably, renewed increases in oil prices pose downside risks to the growth projections,” said Trichet, presenting the ECB’s annual report to a plenary session of the European Parliament.

Oil prices rose on Monday, adding to big gains late on Friday that took U.S. crude back to $59 a barrel.

In June ECB staff cut the mid-point of their 2005 euro zone economic growth projection to 1.4 per cent from 1.6 per cent.

The euro zone economy grew just 0.5 per cent in the first quarter this year, only modestly up from 0.2 per cent in the last three months of 2004.—Reuters