(Adds comment on exchange rates)
BRUSSELS (AFX) - EU economic and monetary affairs commissioner Joaquin Almunia said he is 'confident' the euro zone recovery will continue despite the threat posed by high oil prices and the recent appreciation of the euro.
The outlook for the European economy is 'significantly brighter' than it was a year ago, Almunia said at the European Commission's economic forum.
'The commission expects growth to accelerate this year, fuelled by a progressive increase in domestic demand, particularly investment, and thanks to the continued worldwide demand for our exports,' he said.
'Overall, despite the downside risks from high and volatile oil prices and recent exchange rate movements, we can remain confident at this juncture that global growth will continue to be strong and the recovery in Europe will stay on track,' he said.
Speaking to reporters later, Almunia reiterated that 'we should avoid disorderly movements in exchange rates.'
He added: 'We should try to convince everybody that it's in the interest of all the global economies (to have) a soft or moderate evolution of the exchange rates, not sudden movements.'
Almunia conceded that globalisation is leading some European companies to consider relocating all or part of their production abroad.
While this would have 'very limited impact at the macroeconomic level', globalisation and the changes that it requires entail short-term adjustment costs in some sectors and regions, he said. afxbrussels@afxnews.com vm/cml COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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