BRUSSELS, Feb 21: The European Commission on Thursday cut sharply its 2008 growth estimate for the 15 countries sharing the euro to 1.7 per cent from 2.0 per cent, blaming financial market turmoil, a weak US economy and record oil prices.

The European Union’s executive arm also raised its forecast for eurozone inflation this year to 2.6 per cent from 2.1 per cent previously because of soaring food and energy prices.

Europe clearly begins to feel the impact of the global headwinds in terms of lower growth and higher inflation, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said.

The commission also predicted that the 27-nation EU economy as a whole would grow 2.0 per cent this year, trimming back an estimate of 2.4 per cent from November, the last time it updated its economic forecasts.

The outlook for European economic heavyweight Germany was distinctly darker than in November, with the commission currently forecasting growth of only 1.6 per cent compared with 2.1 per cent previously.

Meanwhile, Italian growth was forecast to be half as strong as previously forecast at only 0.7 per cent, down from 1.4 per cent.

The outlook turned down in France where the economy was forecast to expand 1.7 per cent this year down from the commission’s November estimate of 2.0 per cent.—AFP