ECB's Constancio - concerned by low inflation, sees no deflation

ATHENS, April 1 Tue Apr 1, 2014 11:31am EDT

ATHENS, April 1 (Reuters) - Low euro zone price inflation is a matter of concern and could act as a drag on economic recovery, European Central Bank Vice President Vitor Constancio said on Tuesday, adding that there was no risk of deflation in the bloc.

Constancio said inflation, which fell to 0.5 percent year on year in March from 0.7 percent in February, was expected to bounce back in April.

"The growth rate of inflation is of concern," he told a news conference after a meeting of euro zone finance ministers in Athens.

"It seems to indicate that Europe and the euro area can be in a protracted period of low inflation. That can constitute a drag on the recovery," he said, adding, however: "We see no deflation prospects."

Constancio, who expects the bloc's economy to continue growing in the first quarter of this year, said price inflation would be lifted by the recovery. (Reporting by John O'Donnell, Jan Strupczewski, Tom Koerkemeier and Martin Santa)

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