By Gavin Jones
ROME, Nov 28 (Reuters) - Italian inflation fell in November to its lowest rate for almost a year, but is still running significantly higher than the euro zone average even though the economy is among the bloc's weakest, data showed on Friday.
Italy's EU-harmonised price index showed the annual inflation rate falling for the third month in a row to 2.8 percent from 3.6 percent, while on the main domestic NIC index inflation eased to 2.7 percent from 3.5 percent, according to preliminary figures.
Both rates were the lowest since December last year.
On a month-on-month basis both indexes fell 0.4 percent, national statistics bureau ISTAT said, mainly due to a steep drop in the price of petrol.
The data was well below the median forecast in a Reuters survey of analysts which pointed to a 0.1 percent monthly drop in the HICP and a 3.1 percent annual rate.
However the disinflationary process in Italy, where output has collapsed, is proving more sticky than in the rest of the euro zone, where average inflation plunged in November to 2.1 percent from 3.2 percent.
Italian consumer prices move up and down more slowly than in most European countries at times of volatile oil prices, largely because excise duties, which are not dependent on oil prices, make up a larger component of pump petrol prices in Italy.
"Italian inflation can be expected to keep falling until a trough reached next July, when we see it at 1 percent," said Unicredit MIB analyst Marco Valli.
The 0.4 percent monthly fall on the NIC index was the steepest drop since 1959, but while most Italians will welcome the fall in prices, there are signs that they are partly due to a worrying decline in demand.
Intesa SanPaolo analyst Paolo Mameli said this could be seen in the 0.6 percent fall in the hotels, restaurants and bars sector, which tends to reflect cyclical growth patterns.
Unicredit MIB's Valli also said he was surprised to see that food prices had edged up 0.1 percent in Italy, rather than falling as in other euro zone countries.
The price of bread rose 0.2 percent from the month before and pasta was up 0.5 percent. Pasta was still up 30.0 percent year-on-year, down only slightly from 31.6 percent in October.
Pump petrol prices fell 10.5 pct month-on-month, with the year-on-year rate plunging to -7.5 percent from +5.5 percent in October.
The price of diesel was down 8.6 pct, with the annual rate switching to -2.1 percent from +10.6 percent.
All the above points refer to the NIC index. No such breakdown is available for the HICP.
Earlier on Friday, ISTAT reported that factory gate prices in October fell 1.5 percent month-on-month, the steepest drop since the series was introduced 28 years ago, while the annual rate of increase fell to 5.2 percent from 7.3 percent.
"Oil was the main single driver of the monthly fall but there are declines in numerous product sectors, which confirms the soft demand and general economic weakness we have been seeing in industrial output and other indicators," an ISTAT spokesman said.
(Reporting by Gavin Jones; Editing by Ruth Pitchford0