Euro zone inflation dropped to its slowest pace in nearly three years in September, more than previously estimated, the European Union statistics agency said on Wednesday.
The drop is likely to raise new concerns on the state of the euro zone economy and may reignite a debate within the European Central Bank on how to pursue its goal of keeping inflation close to but below 2 per cent over the medium term.
Eurostat said prices in the 19-country euro zone rose 0.8 per cent on the year, down from its earlier estimate of 0.9 per cent and lower than the market consensus of 0.9 per cent.
Eurostat also said the bloc’s trade surplus with the rest of the world rose to €14.7-billion ($16.2 billion) in August, from 11.9 billions the previous year, as imports fell more than exports.
The revised inflation reading marked a more pronounced slowdown than August’s 1.0 per cent. It was the lowest rate since November 2016, when prices rose 0.6 per cent.
However, a narrower inflation indicator, which strips out volatile energy and unprocessed food prices and is monitored closely by the ECB, rose to 1.2 per cent in September from 1.1 per cent in August, in line with earlier Eurostat estimates on Oct. 1.
Excluding energy, food, alcohol and tobacco, inflation grew 1.0 per cent in September, Eurostat said, confirming earlier figures.
The revision of the headline figure was caused by lower-than-expected inflation for industrial products, another worrying sign for euro zone manufacturers, who are facing drops in output and in confidence.
Prices for industrial goods, excluding energy, went up 0.2 per cent on the year in September, Eurostat said, revising its earlier 0.3 per cent estimate.
Energy prices were confirmed falling by 1.8 per cent. Inflation for service, the largest segment of the euro zone economy, rose 1.5 per cent, in line with previous estimates.
The trade data also released on Wednesday confirmed manufacturing’s difficulties. Exports of goods to the rest of the world fell by 2.2 per cent on the year in August.
Imports dropped even more, 4.1 per cent, as global trade tensions seemed to take their toll. Trade among euro zone states also fell 5.6 per cent on the year.
Despite U.S. threats and sanctions against global partners, the latest data showed widening gaps. The EU trade surplus with the United States grew to 102.7 billion euros in the period from January to August, from 90.6 billions the year before.
The EU’s trade deficit with China grew to 127.4 billion euros over the same period, from 116.3 billions a year earlier.