03/11/2012 12:40 EDT | Updated 05/11/2012 05:12 EDT

ECB official: Inflationary pressures aside from oil and taxes remain more benign

FRANKFURT - A top European Central Bank official says the 17 countries that use the euro will probably see a "very mild recession" this year.

Benoit Coeure told Japan's Nikkei newspaper that growth was held back by scarce bank credit and necessary government budget-cutting because of problems with debt in some eurozone countries.

Coeure said that higher oil prices and taxes had led the bank to raise its outlook for inflation but that temporary "higher energy prices should not have a lasting impact on inflation."

The eurozone economy shrank 0.3 per cent in the fourth quarter, and two quarters of negative growth is one definition of recession.

The ECB's staff projections foresee growth between minus 0.5 per cent and plus 0.3 per cent this year.