LUXEMBOURG, July 6 (Reuters) - The risk of persistently falling prices in the euro zone has decreased, European Central Bank Governing Council member Yves Mersch said on Monday.
"I would not consider at this time that the risk to deflation would have increased, I would rather consider the contrary," Mersch said at a conference on the consequences of the financial crisis.
"During the year 2010 we will again be in strongly positive territory concerning price development," he said, and added the current negative inflation rates are just the flipside of the inflation spike last year.
The euro zone would return to economic growth by mid-2010, but growth rates would be rather subdued after that, Mersch also said in the event, which was organised by the Luxembourg Chamber of Commerce and the Embassy of Sweden.
The ECB kept its rates on hold at 1 percent on Thursday, and analysts expect rates to be kept at this level until the end of the third quarter of 2010. [ECB/INT] (Reporting by Michele Sinner, writing by Sakari Suoninen; Editing by Ron Askew)