BRUSSELS, March 31 (Reuters) – Euro zone inflation slowed sharply in March, a first estimate showed on Tuesday, 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% in March against February for a 0.7% year-on-year gain, decelerating from 1.2% annual growth in February.
Economists polled by Reuters had expected a 0.8% 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 percent over the medium term.
Energy prices plunged 4.3% year-on-year in March while unprocessed food prices were 3.5% higher. Without these two volatile components — a measure the ECB calls core inflation and watches closely in policy decisions — prices grew 1.2% in annual terms, as expected, down from 1.3% in February.
An even narrower inflation measure excluding also alcohol and tobacco prices that many market economists look at, slowed to 1.0% year-on-year in March from 1.2% in February. Economists had expected a slowdown to 1.1%. (Reporting by Jan Strupczewski; editing by Francesco Guarascio)