European Central Bank policymaker Ewald Nowotny is more concerned about slow growth and a risk of falling prices in the euro zone than inflation, he told an Austrian newspaper.

In an interview published on Saturday, Nowotny told Vorarlberger Nachrichten newspaper that he currently saw no significant inflationary risks, adding that energy costs were the main factor driving prices higher at the moment.

I see a bigger danger in a development which in Japan was called 'the phenomenon of the two lost decades', meaning slow growth and no or low inflation, said Nowotny, referring to Japan's struggle since the 1990s to stop prices falling or stagnating.

This would affect the chances of the younger generation in particular, said Nowotny, who also heads the Austrian central bank. One has to fight this decisively.

A German-led group of policymakers is, however, concerned that the wall of money unleashed by the ECB's twin 3-year loan operations could stoke inflation pressures.

ECB President Mario Draghi sought to assuage such concern by stressing last week at the bank's monthly press conference the ECB would keep a close eye on price pressures.

Euro zone inflation eased to 2.6 percent in March - still above the ECB target of just below 2 percent and higher than expected - while a batch of recent economic indicators have heightened concerns that 17-country euro zone economy is in recession.

The ECB expects inflation to stay above 2 percent this year mainly due to higher energy prices and indirect taxes.

(Reporting by Eva Kuehnen; Editing by Ruth Pitchford)