Data released by Eurostat, European Union's statistics agency on Friday showed that inflation in the eurozone slowed more-than-expected in March. According to Eurostat’s flash reading of eurozone CPI report, the annual reading came in way softer at 1.5 percent in March, missing consensus forecast of 1.8 percent and compared to a rise of 2.0 percent in the previous month.
The decline in inflation was driven by energy and food prices. Core figures dropped for the first time in three months, arriving at 0.7 percent versus 0.9 percent last. Markets had predicted the core figures to remain steady at 0.9 percent this month.
"March's sharp slowdown in eurozone inflation was partly driven by temporary factors that will reverse in April, but the big picture is that inflation is now on a downward trend," said Jack Allen, eurozone economist at Capital Economics.
With inflation running close to the European Central Bank's (ECB) 2 percent target, chief Mario Draghi has been under pressure to wind-down efforts to stimulate the eurozone economy. But the latest report could likely reinforce the bank's determination to continue with its stimulus measures despite mounting opposition from Germany, the currency area's largest member.
