Eurozone producer prices rose more than expected in May, posting this year's monthly highest increase, driven mainly by soaring energy prices, estimates from the European Union's statistics office Eurostat showed on Monday. Eurostat said prices at factory gates in the 19 countries sharing the euro increased 0.6 percent in monthly terms for a 3.9 percent year-on-year decline.
Both figures were above market forecasts. Analysts polled by Reuters had on average expected a 0.3 percent month-on-month rise and a 4.1 percent drop on a yearly basis.
The surge of producer prices in May on a monthly basis follows the 0.3 percent drop recorded the previous month, and is the highest in 2016, after two consecutive steep falls in January and February and a 0.2 percent rise in March.
The May reading is another positive sign for the European Central Bank which has been struggling for years to fight ultra-low inflation in the euro zone. Last week Eurostat estimated the single currency union inflation at 0.1 percent in June, the first time consumer prices grew since January.
Producer prices in May month-on-month rose mostly because of a sharp rise in energy prices which soared by 1.7 percent after a 1.1 drop in April.
Prices of intermediate goods grew 0.3 percent and non-durable consumer goods, such as food and clothing, were up 0.1 percent month-on-month. Monthly prices of capital goods, like machinery, and durable consumer goods, such as cars and fridges, were flat in May.
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