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ANNADALE-ON-HUDSON, New York (Reuters) - The euro zone's recovery is gaining speed and growth may even surprise on the upside in the short term but risks remain tilted to the downside, so the time has not yet come to tighten policy, European Central Bank chief economist Peter Praet said.
Any eventual policy tightening will have to be done very cautiously and only once the ECB is convinced that the inflation rebound is self sustaining and there are convincing signs of upward inflationary pressures, Praet, an ECB board member, told a conference in upstate New York.
Although euro zone inflation has recovered in recent months, largely due to higher energy costs, underlying inflation is stuck below 1 percent, well short of the ECB's target of nearly 2 percent.
Reporting by Jonathan Spicer; Writing by Balazs Koranyi; Editing by Alison Williams