Eurozone factory gate inflation slowed less than expected in February due to rising oil prices.
Producer price inflation moderated to 3.6 percent year-on-year in February from a revised 3.8 percent in January, Eurostat said Tuesday. Nonetheless, it stayed above the consensus forecast of 3.5 percent.
On a monthly basis, the industrial producer price index climbed 0.6 percent, following a 0.8 percent gain in January. Economists had expected an increase of 0.5 percent.
IHS Global Insight Chief European Economist Howard Archer said higher energy prices pushed up producer prices, fueling concern that higher oil prices will lead to consumer price inflation being sticky over the months ahead.
The economist said the European Central Bank is unlikely to cut interest rates further even though there are worrying signs that Eurozone economic activity is faltering.
Producer prices, excluding the energy sector, grew at a slower pace of 1.7 percent annually after logging a 2 percent rise in January.
Prices in the energy sector gained 9.3 percent versus last month's 9.2 percent increase. Factory costs of non-durable consumer goods and durable consumer goods rose 2.9 percent and 2.4 percent, respectively.
Intermediate goods prices advanced 1.1 percent year-on-year and capital goods prices increased 1.4 percent.
In the EU27, producer price inflation held steady at 4.3 percent in February. Factory gate inflation was highest in Latvia, where prices rose 10.2 percent. Latvia was followed by Cyprus and Lithuania. Meanwhile, Sweden marked the slowest producer price inflation of 0.2 percent.
by RTT Staff Writer
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