BRUSSELS, June 5 (Reuters) – Euro zone producer prices fell for a seventh consecutive month in April, data showed on Monday, almost entirely due to declining energy prices.
The European Union’s statistics office Eurostat said prices at factory gates in the 20 countries sharing the euro fell 3.2% in April from March and were 1.0% higher year-on-year.
Economists polled by Reuters had expected a monthly fall of 3.1% and a 1.4% year-on-year rise.
Producer prices are an early indication of trends in consumer inflation, which the ECB wants to keep at 2.0% over the medium term, but which stood at 6.1% in May.
The ECB has raised its deposit rate by a combined 375 basis points to 3.25% over the past year and has essentially committed to another 25 basis point hike on June 15. Declining inflation has fuelled a debate about the need for rate increases beyond then.
Eurostat said the monthly fall in producer prices in April was due to a 10.1% drop in energy costs and a 0.6% easing in prices of intermediate goods.
Lower energy prices also held the year-on-year reading down. Without energy, producer prices were 5.1% higher than a year earlier, mainly because of a 10.9% increase in non-durable consumer products, such as food.
Durable consumer goods were also 7.3% higher and capital goods 6.1% up year-on-year.
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