BRUSSELS, March 31 — Euro zone inflation slowed sharply in March, a first estimate showed today, as an oil price war between Russia and Saudi Arabia slashed energy prices and the coronavirus pandemic brought economic activity across the bloc almost to a halt.
The European Union’s statistics office Eurostat said consumer prices in the 19 countries sharing the euro rose 0.5 per cent in March against February for a 0.7 per cent year-on-year gain, decelerating from 1.2 per cent annual growth in February.
Economists polled by Reuters had expected a 0.8 per cent year-on-year increase. The fall brings price growth even further away from the European Central Bank’s target of below, but close to 2 per cent over the medium term.
Energy prices plunged 4.3 per cent year-on-year in March while unprocessed food prices were 3.5 per cent higher. Without these two volatile components — a measure the ECB calls core inflation and watches closely in policy decisions — prices grew 1.2 per cent in annual terms, as expected, down from 1.3 per cent in February.
An even narrower inflation measure excluding also alcohol and tobacco prices that many market economists look at, slowed to 1.0 per cent year-on-year in March from 1.2 per cent in February. Economists had expected a slowdown to 1.1 per cent. — Reuters
