Euro zone producer prices drop for seventh month in July

Published On : 09/05/2023

BRUSSELS (Reuters) – Euro zone producer prices fell for a seventh consecutive month in July, data showed on Tuesday, with figures sharply lower than a year earlier possibly offering some comfort to the European Central Bank.

The European Union’s statistics office Eurostat said prices at factory gates in the 20 countries sharing the euro fell 0.5% in July from June and by 7.6% year-on-year.

Economists polled by Reuters had expected a monthly fall of 0.6% and a 7.6% year-on-year decline.

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 5.3% in August.

The ECB increased rates at its fastest pace on record in the past year, taking them to a more than two-decade high, but it has raised the possibility of a pause at its September meeting.

The monthly fall in euro zone producer prices in July was driven by a 1.2% easing of prices for intermediate goods, such as steel, sugar or wood, and a 0.9% decline in energy costs.

Prices for capital goods, such as machinery, tools or buildings, and for durable consumer goods rose by 0.2%, while non-durable goods prices were up by 0.1%.

Year-on-year, energy costs fell sharply, with intermediate goods prices also down. Prices for capital, durable and non-durable goods were all at least 4% higher, although these price increases have steadily eased since late 2022.

For Eurostat release, click on:

http://ec.europa.eu/eurostat/news/news-releases

(Reporting by Philip Blenkinsop; Editing by Sudip Kar-Gupta)

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