Annual inflation in the eurozone reached 0 per cent in March, the EU statistics office Eurostat said Thursday, revising upward an earlier estimate of minus 0.1 per cent.
But the rate still remains below the European Central Bank's annual inflation target of just under 2 per cent, despite efforts to boost consumer prices. Eurozone inflation had slipped briefly into negative territory in February.
Fears of deflation have dogged the 19-country European currency bloc, but its officials argue that the negative rates seen so far have not been driven by an across-the-board drop in price levels but rather external factors such as oil prices.
In March, gains in service sector prices as well as food, alcohol and tobacco only slightly offset another sharp fall in energy costs, the Eurostat data showed. Energy prices fell 8.7 per cent on the year in March after dropping 8.1 per cent in February.
In the wider, 28-country European Union, the inflation rate also reached 0 per cent in March, Eurostat said.
Fifteen countries in the bloc saw prices fall that month, with Romania, Cyprus and Bulgaria in the lead with inflation rates of around minus 2 per cent.