European Central Bank president Jean-Claude Trichet has warned that the euro zone faces several more tough months.
'Global economic weakness and very sluggish domestic demand can be expected to persist in the last quarter of 2008 and in the next few quarters,' Trichet told MEPs during his regular appearance at the European Parliament in Brussels.
He said a recovery should 'gradually' take place, helped by a fall in commodity prices, if financial tensions eased. Trichet reiterated the bank's forecast for growth of between -1% and 0% in 2009.
The euro zone economy contracted in the second and third quarters of 2008, plunging the zone of some 320 million people into its first technical recession. The ECB slashed its lending rates on Thursday by a record 0.75 percentage points to 2.5%.
