Euro zone grew modestly in Q1 but faces tough future, ECB VP says

FRANKFURT (Reuters) -The euro zone economy likely grew at a modest pace in the first quarter of the year but risks have intensified amid exceptional uncertainty that could weigh on growth in the months ahead, European Central Bank Vice President Luis de Guindos said on Monday.

"Euro area exporters are now facing new barriers, and tensions in financial markets and geopolitical uncertainty will likely weigh on business investment," he told European lawmakers in Brussels. "In this environment, consumers may become cautious about the future and hold back spending."

He added that inflation is now expected to hover around the bank's 2% target.

(Reporting by Balazs KoranyiEditing by Tomasz Janowski)