BRUSSELS, Dec. 11 (Xinhua) -- Despite a surging euro, the European Central Bank raised its benchmark interest rate near the year-end, the sixth time in 12 months.

    The exceptional move was no surprise considering the inflation danger resulting from an accelerating economy in the 12-nation region sharing the same currency.

    After an unexpected downturn in 2005, the euro-zone economy started picking up at the end of last year. A strong recovery was underway throughout 2006, and set to continue into the next two years.     

    "BEST IN THE DECADE"

    In the latest autumn forecasts released in November, the European Commission raised its estimates of the euro-zone economic

    growth in 2006 to 2.6 percent, i.e. more than 1 percentage point above last year's growth and 0.5 percentage point higher than the forecast made six months ago.

    The upward revision of the forecasts was mainly justified by the better-than-expected outcome of the first half of 2006. Real GDP rose by 0.8 percent quarter-on-quarter in the first three months and by 0.9 percent in the second quarter of 2006. This was the strongest pace of expansion in six years.

    Although GDP growth slightly slowed down to 0.5 percent in the third quarter, dragged down by poor performance in France and Germany, the two largest economies in the euro zone, it was widely

    regarded as remaining solid. Economists expect the positive trend to have continued into the last months of the year.

    Robust economic growth was also evident in the whole European Union, whose growth rate was estimated to be 2.7 percent this year, up from 1.4 percent in 2005.

    "After years of disappointing results, the European Union economy in 2006 will be at its best since the beginning of the decade," said Joaquin Almunia, the EU Economic and Monetary Affairs Commissioner.