(Adds economists' comments)
By Jan Strupczewski
MADRID, April 16 (Reuters) - Higher energy costs drove a year-on-year increase in euro zone consumer prices in March, though the overall gain fell short of market expectations and price growth is seen subdued this year.
The European Union's statistics office, Eurostat, said consumer prices in the 16-country currency area rose 0.9 percent month-on-month and 1.4 percent year-on-year.
Economists polled by Reuters had on average expected a 0.9 percent monthly rise and a 1.5 percent year-on-year increase, the initial estimate issued about two weeks ago by Eurostat.
"Euro zone consumer price inflation is likely to hover around 1.5 percent in the near term, and it still seems set to stay below the ECB's target rate of 'close to but just below 2.0 percent' through 2010 and, very possibly, 2011 as well," said Howard Archer, economist at IHS Global Insight.
"The spike up in euro zone consumer price inflation to 1.4 percent in March does not fundamentally alter our belief that the ECB will keep interest rates down at 1.00 percent for the rest of 2010," he said.
Energy prices jumped 2.6 percent month-on-month for a 7.2 percent annual increase.
What the European Central Bank calls core inflation, which excludes volatile energy and unprocessed food prices, was 0.7 percent month-on-month and 0.9 percent year-on-year, roughly in line with market expectations.
The ECB, which wants to keep annual inflation just below 2 percent over the medium term, keenly watches core inflation to see how energy and food price shocks affect wider price growth.
Economists said core inflation was likely to have been boosted by one-off effects from Easter and that the measure would ease again in coming months.
Separately Eurostat said the euro zone swung into a trade surplus of 2.6 billion euros ($3.6 billion) in February from a downwardly revised 9 billion euro deficit in January, thanks to a 10 percent year-on-year jump in exports and only a 6 percent rise in imports, not adjusted for seasonal swings.
Economists polled by Reuters had expected an unadjusted trade deficit of 1 billion euros for February.
Adjusted for seasonality, the surplus in February was even higher -- 3.3 billion euros, up from 1.9 billion in January -- as exports rose 2.7 percent on the month and imports gained only 1.5 percent.
"The euro zone trade data for February add to the recent generally improved news on the euro zone economy and boost hopes that net trade will make a positive contribution to GDP in the first quarter," Archer said.
The sharp rise in exports points to a rebound in global demand for euro zone goods. The increase in imports also shows there is more domestic demand, which could bode well for prospects ofeconomic recovery.
"Euro zone imports rose by 1.5 percent month-on-month in February, which was the fourth successive gain. While this was probably partly the consequence of higher oil prices, it also suggests euro zone domestic demand is firming," Archer said. (Editing by Dale Hudson)