Energy cost plunge pulls down euro zone producer prices in January

BRUSSELS (Reuters) - Euro zone producer prices fell by more than expected in January, pulled down by plunging costs of energy, data from the European Union's statistics office Eurostat showed on Tuesday.

Eurostat said prices at factory gates in the 19 countries using the euro fell 0.9 percent month-on-month in January for a 3.4 percent year-on-year fall. Economists polled by Reuters had expected a 0.7 percent monthly and a 3.0 percent annual decline.

Factory gate prices fell by 1.0 percent month-on-month and by 2.6 percent year-on-year in December

Producer prices are an indication of inflationary pressures in the economy early in pipeline as the rise or fall of prices at factory gates usually translates into higher or lower prices for consumers, unless the change is absorbed by intermediaries.

The first estimate of euro zone consumer inflation in February was a 0.3 percent year-on-year fall, data showed on Monday.

The European Central Bank wants to keep inflation below, but close to 2 percent over the medium term and plans to launch euro zone government bond purchases this month to inject more money into the economy to accelerate price growth.

(Reporting By Jan Strupczewski; editing by Philip Blenkinsop)