Producer prices are falling while inflation is rising: the Euro Zone paradox

Producer prices in the euro zone fell by 0.1 percent in March compared to a month earlier. The European statistical office Eurostat announced this.

Economists generally expected an increase of 0.1 percent. In February, prices charged by manufacturers in the euro area went up by 0.1 percent.

Across the European Union, a 0.1 percent increase was recorded on a monthly basis in March, according to Eurostat.

Inflation in the euro zone rose in April to 1.7 percent on an annual basis, from 1.4 percent in March. The European statistics agency Eurostat reported this on the basis of a provisional figure.

Economists generally expected an inflation rate of 1.6 percent. Core inflation, without the influence of the sharply fluctuating prices for energy and food and beverages, amounted to 1.2 percent. That was 0.8 percent a month earlier.

In a reaction to the figure, ING economist Bert Colijn said that inflation rates can often fluctuate at this time of the year due to timing effects of Easter. That effect and oil prices boosted inflation in April, but according to Colijn the trend continues to decline. He thinks that core inflation will decline again in May.

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