ECB Sees Fragile Recovery in Euro Zone

The European Central Bank said on Thursday that the euro-zone economy was heading for a period of "sustained and gradual" growth, despite the risks of high oil prices and weak consumer confidence. The comments were supported by projections from the European Union's statistics agency Eurostat, which said growth in the euro-zone economy had eased in the second quarter to 0.3 percent from the previous three months but was set to gather steam over the rest of the year. "The governing council expects that the euro area economy will expand in a sustained, albeit gradual, manner," the ECB said in its monthly statement. The bank said robust global demand and an improvement in the competitiveness of European industry would help boost exports. Nevertheless, high oil prices and a lack of consumer confidence represent the "main downside risks" that could choke off a pick-up in activity. Earlier on Thursday, the International Energy Agency said high oil prices had so far not reversed the expansion of the global economy. Statistics from Germany showed that euro-zone's biggest economy had stagnated in the second quarter, showing no growth compared to the previous three months.