Trichet says euro zone growth to hit trough in Q2 and Q3

DUBLIN (Reuters) - Euro zone growth is likely to be weak in the second and third quarter before staging a recovery, and the risk of second-round inflation effects needs to be taken seriously and prevented, ECB President Jean-Claude Trichet said.

"Our base-line scenario is that we will have a trough in the profile of growth in the euro area in the second and third quarters of this year and, following this, a progressive return to ongoing moderate growth," Trichet said.

The comments by the head of the European Central Bank were published on Friday based on a joint interview with four European newspapers conducted on July 11.

Growth risks included the current "very significant financial market correction, the possible further increases in oil and commodity prices, and the possible unwinding of global financial imbalances", Trichet said, according to the transcript of an interview published on the website of the Irish Times.

Trichet said that markets were still suffering from very severe turbulence, and that the ECB remained determined to get inflation back below 2 percent from the record 4 percent in June.

"The latest rise in unit labour costs is a piece of data that we need to take into account. I would certainly not say that second-round effects are currently a general phenomenon. But there are signs that we need to take seriously," he said.

"In fact our message is that we should prevent second-round effects."

Euro zone inflation reached a record due largely to rocketing food and fuel prices. The data was followed in July by the ECB's first rate rise in over a year, to 4.25 percent from 4 percent.

Trichet reiterated that the ECB's decision to raise rates would go toward achieving price stability in the medium term.