BRUSSELS, Belgium (AP) -- Volatile foreign exchange rates and rising inflation are hurting the euro-zone's economic growth prospects, the head of a group of the region's finance ministers said Monday.
''Today we have to tell the truth and say that the economic prospects are worse'' than they were in November, Jean-Claud Juncker said during testimony before a committee at the European Parliament.
Juncker, who is both Luxembourg's finance minister and prime minister, was appearing in his role as head of the Eurogroup, the group of finance ministers representing the 15 countries that use the common EU currency, euro.
Juncker said the European Commission, the European Union's executive arm, will cut its forecast for economic growth later this month from the 1.8 percent it expected in February. He added, however, the euro zone isn't at risk of sliding into a recession.
The economy is slowing down but ''in Europe we can't speak about anything more than that. We do not run the risk of being drawn into a spiral of recession. This is, however, the case of the U.S.,'' he said.
The commission is slated to publish its spring forecasts on April 28. Juncker said the commission's 2.6 percent prediction for euro-zone inflation this year will be raised, adding it is ''worried'' about the rising inflation.
Consumer prices rose 3.5 percent in the euro zone last month, a 16-year high.
Volatility in the euro's exchange rate is another key worry for the euro-zone economy, according to Juncker, who said the currency has risen about 17 percent against the U.S. dollar over the past year. Juncker said he and other euro-zone officials will raise this issue at the Group of Seven industrialized nations meeting in Washington, D.C. starting Friday.
The G7 has to ''look at the developments of the euro over the past year,'' Juncker said. He noted that the euro's exchange rate should better reflect the euro-zone's economic fundamentals and said excessive swings in currency rates are a worry for the region's economic growth.
Juncker said he will raise the currency issue when he meets President Bush on Wednesday, noting that Bush and other U.S. officials previously have said it is in the country's interest to have a strong dollar.
''We will be talking about monetary problems on the two sides of the Atlantic,'' Juncker said.
