BRUSSELS (Reuters) - Euro zone producer prices suffered their steepest fall since the 2008 financial crisis in March, data showed on Tuesday, dropping by more than expected as the COVID-19 pandemic sharply reduced demand for energy.
The European Union’s statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro fell by 1.5% month-on-month in March for a 2.8% year-on-year decline.
The former was the steepest decline since November 2008. Economists polled by Reuters had expected drops of 1.3% for the month, and 2.6% year-on-year.
Producer prices show inflationary pressure early in the pipeline because unless their changes are absorbed by retailers and intermediaries, they directly affect the final price for consumers.
Energy prices tumbled 5.5% on the month and by 11.3% year-on-year in March pulled down by the oil-price war between Russia and Saudi Arabia and falling demand for fuel as economies around the world ground to a halt because of the pandemic.
Without the volatile energy component, industrial producer prices fell only 0.2% on the month and were 0.2% higher year-on-year.
Reporting by Jan Strupczewski; editing by Philip Blenkinsop