HELSINKI (Reuters) - Financial market turbulence has damaged the euro zone's growth outlook but there are strong upward inflation pressures, European Central Bank Governing Council member Erkki Liikanen said on Monday.

Liikanen's remarks, made during the presentation of the Bank of Finland's quarterly economic outlook, largely echo the ECB's December 6 policy statement which followed its decision to hold interest rates at 4.0 percent.

"Financial market turbulence has increased uncertainty and the downside risks to growth," he said.

Economic fundamentals were strong in the euro zone, but confidence had recently suffered, the Bank of Finland said in the report.

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ECB staff forecast growth will slow to around 2.0 percent next year from roughly 2.6 percent currently, before recovering slightly to 2.1 percent in 2009.

Inflation is expected to average 2.5 percent next year, above the ECB's target of just below 2 percent, before returning to its target level for 2009.

But Liikanen said that this 2009 forecast was more optimistic than his own, a view shared by ECB Executive Board member Juergen Stark who also stressed the upside risks to the staff projections in remarks reported on Monday.

"The latest information confirms the existence of strong short-term upward pressure on inflation. It also confirms the assessment of the ECB Governing Council that there are upside risks to price stability over the medium term," Liikanen said.

"Against the background, the Governing Council indicated on Thursday December 6 that by acting in a firm and timely manner, it will be able to ensure that second-round effects and risks to price stability over the medium term do not materialize."

ECB President Jean-Claude Trichet said on Thursday that the Governing Council had not discussed cutting interest rates, and that some members had urged an increase in the cost of borrowing.

(Reporting by Sakari Suoninen, Tarmo Virki and Sami Torma; writing by David Milliken; editing by David Stamp)