The European Central Bank (ECB) held its key interest rate at an all-time low of 1.0 percent today as the 16-nation eurozone economy showed clear signs of a rebound.
Sweden's central bank also left its main lending rate at a record low of 0.25 percent, and issued improved forecasts for the Swedish economy.
"There are increasing signs of stability in economic activity in the euro area and elsewhere," ECB president Jean-Claude Trichet told a press conference after the bank held its benchmark interest rate at an all-time low of 1.0 percent.
"This is consistent with the expectation that the significant contraction in economic activity has come to an end and is now followed by a period of stabilisation and very gradual recovery."
The bank said it now expected the eurozone economy to register positive growth next year as it revised up its forecasts for GDP and inflation for the 16-nation zone.
Earlier, the OECD had signalled that the eurozone and US economies should emerge from recession in the third quarter of this year.
Trichet told reporters his staff had forecast GDP of plus 0.2 percent in 2010, a significant upward revision from the minus 0.3 percent the bank estimated in its previous forecasts in June.
For this year, the ECB reckons output will shrink by 4.1 percent, again an improvement from its previous forecast of minus 4.6 percent.
"The risks to this outlook remain broadly balanced," Trichet said.
"However, uncertainty remains high and the persistent volatility in incoming data warrants a cautious interpretation of available information," he added.
"Overall, the recovery is expected to be rather uneven."
The increase in the growth forecasts comes as evidence mounts that the euro area is recovering from the first recession since its creation.
The 16-nation economy shrank in the second quarter but by just 0.1 percent, official EU statistics showed on Wednesday.
The 0.1 percent decline was the fifth quarter running of falling economic output for the area but marked a huge improvement on the record 2.5 percent plunge in the first three months of the year.
Another survey, the closely watched purchasing managers index (PMI) published earlier today, suggested the euro area business acticity expanded in August after 15 months of solid contraction.
The apparent recovery has prompted other institutions to revise higher their projections for the eurozone. Earlier Thursday, the OECD raised its own 2009 estimate of economic activity to minus 3.9 percent, having previously forecast a contraction of 4.8 percent.
It said that the eurozone economy was on track to escape from recession in the third quarter, together with the US economy, but qualified this by hedging the forecasts with a wide margin of possible error.
Trichet also said that the ECB had revised higher its forecasts for inflation to 0.4 percent this year and 1.2 percent in 2010, compared to previous estimates of 0.3 percent and 1.0 percent.
He said inflationary pressure was likely to be low and he expected the zone to exit its recent period of deflation, or falling prices, "within the coming months".