29 September 2003, 13:19  Italian producer prices edge higher in August

ROME, Sept 29 - Italian producer prices rose marginally in August, pushed higher by rising energy and utilities costs, figures from statistics agency Istat showed on Monday. Goods leaving factory gates rose 0.2 percent in the month, or 1.3 percent year on year, increasing for the second month in a row. Producer prices are a key gauge of future consumer price inflation. The biggest rise in prices came in energy and utilities with refined petrol products rising 1.6 percent month-on-month and electricity, gas and water prices gaining 0.9 percent, or 3.9 percent year-on-year. If energy and utilities costs had been excluded from the overall calculation, producer prices would not have risen month-on-month and would have gained just 0.8 percent on the year, Istat said. In Germany, the euro zone's largest economy, producer prices rose at their sharpest rate in two years in August, also driven up by a spike in energy prices. Earlier, Istat reported that Italian consumer prices rose a provisional 0.2 percent in September, or 2.8 percent year-on-year. That rate was level with August and showed that Italian inflation remains stubbornly above Europe's average. Persistent price rises have hit consumer confidence, which in turn has been a major drag on growth. With domestic demand accounting for more than two-thirds of national output, consumer demand is usually a major driver of the economy. Instead, Italy's economy is expected to grow barely 0.5 percent this year and is already technically in recession following a contraction in growth in the first two quarters of the year.//

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