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Belgium says euro zone inflation spike is temporary

Sat Apr 12, 2008 10:27am EDT

WASHINGTON, April 12 (Reuters) - Euro zone inflation has been boosted by high energy and goods prices but should soon subside, Belgian Finance Minister Didier Reynders said on Saturday.

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"High energy and food prices have caused a spike in inflation in the euro area. This should be temporary," he told the International Monetary and Financial Committee.

"A credible policy by the ECB provides an anchor for consumers' expectations about price stability."

Reynders -- who addressed the IMFC on behalf of Austria, Belarus, Belgium, Czech Republic, Hungary, Kazakhstan, Luxembourg, Slovak Republic, Slovenia, and Turkey -- also said inflation warranted vigilance in emerging European countries.

"Most countries in emerging Europe continue to show high growth rates," he said.

"The containment of inflation in these countries requires vigilant monetary policy supported by fiscal restraint, moderate wage developments and well-functioning goods and services markets."

Turning to Turkey, he said strengthened fundamentals had so far helped to limit the impact that global financial market turmoil had had on the country's economy.

The Turkish "authorities are determined to maintain rigorous policy implementation so as to weather these challenges successfully," Reynders said.

(Reporting by Swaha Pattanaik, Editing by Chizu Nomiyama)



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