European zone producer prices fell for the fifth consecutive month and exceeded expectations in February, almost entirely due to lower energy prices.
The EU statistics department Eurostat said on Tuesday that factory prices in the 20 countries that share the euro currency fell by 0.5% month-on-month in February for a 13.2% year-on-year increase.
This marked a flat contraction from a peak of 43.4% in August, when energy prices were more than double their level a year earlier. Economists polled by Reuters had expected a monthly drop of 0.3% and a year-on-year decline of 13.3%.
The energy component decreased by 1.6%, although it was still up 17.4% from the previous year, when Russia invaded Ukraine.
Excluding the volatile energy component, producer prices rose 0.2% month-on-month and rose 10.2% year-on-year. Producer prices are an early signal of inflationary trends because changes are usually passed on to end consumers.
Consumer inflation eased to 6.3% in March, but core inflation hit a new all-time high. The European Central Bank wants to keep inflation at 2.0% and has raised interest rates repeatedly to curb price growth.
