June 24 (Reuters) – European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying he does not see deflation risks materialising in the euro zone.
In an interview with Italy’s La Repubblica newspaper, he also denied that budget cuts would drag on growth in the 16-nation region.
Aasked about the risk of deflation, he said: “I don’t think that such risks could materialise”, adding that inflation expectstions were well anchored.
“As regards the economy, the idea that austerity measures could trigger stagnation is incorrect,” Trichet said, according to am English-language transcript published on the ECB’s Web site. (Reporting by Krista Hughes)