VIENNA (Reuters) – Recession in the euro zone is over but growth will remain sluggish next year, so there is no need to raise interest rates soon, European Central Bank (ECB) Governing Council member Ewald Nowotny said on Monday.

However, the ECB will look vigilantly at monetary and business indicators that could indicate a rise in inflationary expectations, Nowotny said at the Reuters Central European Investment Summit, which began on Monday in Vienna and Milan.

“What we see is that this very strong and dramatic decline of the economy has reached the bottom,” Nowotny said.

“We will experience in most (European) countries in the third and fourth quarters of 2009 positive growth rates, so that means technically the recession will end this year,” he said.

“But the growth that we see is still very sluggish for the next year. For 2010 for the euro zone there will be growth rates of 0.5-1 percent. That means it is a very slow recovery, the economy is very weak,” he said.

Nowotny stuck to the ECB’s policy of not pre-committing to interest rate changes, but he said he did not see personally a need to move away from current record low interest rates of 1 percent any time soon. The ECB was also not planning to unwind its support for money markets this year, he said.

“Looking at all those factors (influencing inflation expectations), for the time being I personally would not see a need for any policy changes soon,” Nowotny said. “But we are vigilant to observe how things are developing.”

VIENNA, Sept 28 (Reuters) – Recession in the euro zone is over but growth will remain sluggish next year, so there is no need to raise interest rates soon, European Central Bank (ECB) Governing Council member Ewald Nowotny said on Monday.

However, the ECB will look vigilantly at monetary and business indicators that could indicate a rise in inflationary expectations, Nowotny said at the Reuters Central European Investment Summit, which began on Monday in Vienna and Milan.

“What we see is that this very strong and dramatic decline of the economy has reached the bottom,” Nowotny said.

“We will experience in most (European) countries in the third and fourth quarters of 2009 positive growth rates, so that means technically the recession will end this year,” he said.

“But the growth that we see is still very sluggish for the next year. For 2010 for the euro zone there will be growth rates of 0.5-1 percent. That means it is a very slow recovery, the economy is very weak,” he said.

Nowotny stuck to the ECB’s policy of not pre-committing to interest rate changes, but he said he did not see personally a need to move away from current record low interest rates of 1 percent any time soon. The ECB was also not planning to unwind its support for money markets this year, he said.

“Looking at all those factors (influencing inflation expectations), for the time being I personally would not see a need for any policy changes soon,” Nowotny said. “But we are vigilant to observe how things are developing.”