Berlin - European industrial production plunged by an annual 18.4 per cent in February, according to data released Thursday, amid dwindling inflationary pressures and signs that the global recession has tightened its grip on the region's economy.

The European Union's statistics office, Eurostat, said the sharp fall in industrial production in the 16-member eurozone followed a 2.3 per cent drop in February compared with January.

However, the month-on-month February fall was less than the 2.7 per cent drop predicted by economists.

Eurostat also revised down the January monthly decline to a 2.4 per cent decrease from an initial estimate of a 3.5 per cent slump.

Eurostat data confirmed March inflation in the eurozone coming in at an annual 0.6 per cent, compared with 1.2 per cent in February as energy costs and food prices eased. A year earlier the eurozone inflation rate stood at 3.8 per cent.

Moreover, the signs of continuing economic weakness in the eurozone and falling inflation are likely to help strengthen the case for the European Central Bank to deliver another rate cut at its meeting set for next month.

In the broader 27-member European Union, industrial production in dropped by a hefty 17.5 per cent year-on-year in February and by 1.9 per cent month-on-month.

Annual inflation in the EU was 1.3 per cent in March 2009, down from 1.8 per cent in February. A year earlier the rate was 3.8 per cent. (dpa)