European industrial production plunges as inflation drops

April 16th, 2009 - 5:09 pm ICT by IANS  

Berlin, April 16 (DPA) European industrial production plunged by an annual 18.4 percent in February, according to data released Thursday, amid dwindling inflationary pressures and signs that the global recession has tightened its grip on the region’s economy.
The European Union’s (EU) statistics office, Eurostat, said the sharp fall in industrial production in the 16-member eurozone followed a 2.3 percent drop in February compared with January.

However, the month-on-month February fall was less than the 2.7 percent drop predicted by economists.

Eurostat also revised down the January monthly decline to a 2.4 percent decrease from an initial estimate of a 3.5 percent slump.

Eurostat data confirmed March inflation in the eurozone coming in at an annual 0.6 percent, compared with 1.2 percent in February as energy costs and food prices eased. A year earlier the eurozone inflation rate stood at 3.8 percent.

Moreover, the signs of continuing economic weakness in the eurozone and falling inflation are likely to help strengthen the case for the European Central Bank to deliver another rate cut at its meeting set for next month.

In the broader 27-member European Union, industrial production dropped by a hefty 17.5 percent year-on-year in February and by 1.9 percent month-on-month.

Annual inflation in the EU was 1.3 percent in March 2009, down from 1.8 percent in February. A year earlier the rate was 3.8 percent.

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