The eurozone economy is facing growing downside risks and may see a more marked slowdown in the next years, finance ministers of the 13-nation bloc sharing the same currency were told Monday.

At their regular monthly meeting here today, the eurozone finance ministers heard a report from Michael Deppler, director of the European Department at the International Monetary Fund (IMF), who painted a darker picture of the eurozone economy.

"According to him [Deppler], growth in the euro area could be around 2.0 percent, even below 2.0 percent, slightly below 2.0 percent next year," the European Union (EU)'s Economic and Monetary Affairs Commissioner Joaquin Almunia said after the meeting.

In October, the IMF had forecast that the eurozone economy would expand by 2.1 percent next year. Only three weeks ago, the European Commission said the economic growth in the euro zone was expected to be 2.2 percent in 2008, which had already been revised down from 2.5 percent under a previous forecast.

Describing Deppler as less optimistic, Almunia acknowledged that the downside risks to the eurozone economic growth are growing as the financial turmoil, triggered by the sub-prime mortgage crisis in the United States this summer, and soaring oil prices are likely to take bigger toll on the real economy.

"If the information today regarding oil prices, or the U.S. economy, or financial markets situation had been integrated in our forecasts... with this new information we would have had lower figures for growth," he said.

Earlier today, Almunia told a separate conference that the financial turmoil is not over yet, warning the persistent uncertainty has resulted in a collapse in investor confidence.

With more financial institutions coming to terms with significant losses, Almunia said global credit conditions have tightened and are set to tighten further, which implies fewer borrowing opportunities and in turn has raised the prospect of slower economic growth in the coming years.

Inflation in the eurozone has risen in recent months, due to oil and food price hikes, which created a dilemma for the European Central Bank (ECB) when deciding whether to raise its interest rate to curb inflation or leave it unchanged to support growth.

"We are facing upside risks to the baseline scenario in inflation," Almunia said.

Official figures from the EU showed annual inflation in the euro zone jumped to 3.0 percent in November, the six-year high since the circulation of euro in 2002. It has become a major concern for the eurozone finance ministers.

"You cannot ignore the increased inflation risks we are facing. The economy is robust but slowing down a little bit, and we have to face these risks," Jean-Claude Juncker, chairman of the euro group and Luxembourg Prime Minister told journalists ahead of Monday's meeting.

However, some ministers played down the risk of a major slowdown, pointing to the recent growth in employment and productivity in the euro zone after a long period of stagnation.

"I'm not concerned about inflation. The economy has gained momentum. The economic figures are still very good in Germany, worldwide and in Europe," German Finance Minister Peer Steinbrueck said.

However, both Almunia and Juncker said the improvement in productivity may be largely cyclical in nature, rather than structural.