Euro zone prices confirmed flat year-on-year in April, core inflation inches higher

[May 19, 2015]  BRUSSELS (Reuters) - Euro zone prices were flat year-on-year in April, ending four months of falls, the European Union's statistics office Eurostat confirmed on Tuesday.

Eurostat said consumer prices in the 19 countries sharing the euro rose 0.2 percent month-on-month in April for a zero percent year-on-year reading, confirming its earlier estimate.

Core inflation, which excludes the most volatile components of unprocessed food and energy, rose 0.2 percent month-on-month for a 0.7 percent year-on-year increase. It had initially estimated the year-on-year rise at 0.6 percent.

The European Central Bank wants to keep the headline measures of inflation at below, but close to 2 percent year-on-year over the medium term.

Worried by a trend of falling prices, the bank started buying government bonds in March to inject more cash in to the economy and make prices rise again.

Eurostat said that in April, more expensive restaurants and cafes, rents and vegetables had the biggest upward impact on the overall year-on-year inflation value, while cheaper gas, heating oil and automotive fuel pulled the index down.

The ECB expects euro zone inflation to stay close to zero until autumn of this year, before starting to rise towards the end of the year towards 1.5 percent and reach the ECB's target towards the end of 2016.

Separately, Eurostat said the euro zone's unadjusted external trade surplus increased to 23.4 billion euros ($26.2 billion) in March from 16.1 billion euros a year earlier as exports jumped 11 percent and imports rose by only 7 percent.

($1 = 0.8935 euros)

(Reporting By Jan Strupczewski; editing by Philip Blenkinsop)

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