French consumer price inflation in April slowed to the lowest level since 1957, the statistical office INSEE said Wednesday.

Annual inflation eased to 0.1% in April from 0.3% recorded in March, with the increase coming in less than the expected rate of 0.2% due to falling energy prices. According to the official report, the April inflation rate is the lowest since 1957.

The slight growth in the consumer price index was the consequence of the rise in prices of transport and communication services and other services due to the spring holidays. Prices of actual rentals, water supply and refuse collection as well as health services edged up too. However, energy prices dropped 13.8% followed by a 2.7% decline in the prices of manufactured goods including energy.

On a monthly basis, consumer prices climbed 0.2%, unchanged from March and in line with the forecast.

The harmonized index of consumer prices, or HICP, climbed 0.1% annually after rising 0.4% in March, while economists expected a 0.2% increase. Thus, the HICP inflation touched it's lowest level since the data series began in 1996. The monthly inflation rate was identical to the annual increase.

Moreover, the underlying core inflation was flat on a month-on-month basis, while remained unchanged at 1.6% compared to the previous year.

Also on Wednesday, results of a quarterly survey carried out by the INSEE showed that investment expectations of business managers in the French manufacturing industry had deteriorated over the past three months. Business leaders anticipate a sharp drop in their equipment expenditures in 2009 and are very pessimistic for the second half of 2009.

Elsewhere, the Bank of France said the country's current account deficit widened to EUR 2.2 billion in March from a EUR 2 billion deficit in February.

Meanwhile, in Spain, a fellow EU nation, consumer prices declined 0.2% in April from the previous year following a drop of 0.1% in March.

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