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FRANKFURT : The European Central Bank on Thursday slashed its eurozone growth forecast for 2008 to 1.4 percent from 1.8 percent, and cut its 2009 estimates to 1.2 percent from 1.5 percent.
The ECB in turn raised its 2008 eurozone inflation forecast to 3.5 percent from 3.4 percent previously, with 2009 put at 2.6 percent, up from 2.4 percent.
The figures are mid-points of forecast ranges established by bank staff.
Business activity in the 15 nations that share the euro contracted for the third month running in August, although the pace moderated slightly, the results of a survey showed on Wednesday.
The eurozone's purchasing managers' index compiled by data and research group Markit was reported at 48.2 points in August, up from a six-and-a-half year low of 47.8 points in July.
Levels below 50 points indicate an economic slowdown.
On Tuesday, the Organisation for Economic Cooperation and Development (OECD) revised its eurozone growth forecast lower, saying the economy would expand by 1.3 percent this year instead of 1.7 percent.
The eurozone contracted in the second quarter by 0.2 percent, its first quarter-on-quarter decrease since the bloc was formed in 1999.
Business activity has been undermined by high prices for oil and other commodities, the euro's strength which undercuts exports, slumping global demand and tighter credit conditions. - AFP/de
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