EUROZONE consumer prices fell again in March, as expected, but the decline was the smallest this year, indicating the price of goods and services could start rising again soon.

    Meanwhile, the region’s unemployment rate fell to its lowest in almost three years, a sign the economy is picking up steam and inflation is likely to rise.

    Also, confidence in the eurozone’s economy rose for a fourth straight month in March to its highest since July 2011, suggesting the weak euro and lower oil prices are spurring the recovery.

    Consumer prices in the 19 countries sharing the euro fell 0.1 percent year on year this month, the European Union’s statistics office Eurostat estimated. Prices fell 0.3 percent in February and 0.6 percent in January.

    The bottoming out of price declines is likely to be welcome news for the European Central Bank, which wants to keep inflation below, but close to 2 percent over the medium term. It started printing money in March to inject more cash into the economy and ward off concerns of persistently falling prices, or deflation.

    The European Commission’s economic sentiment indicator rose by 1.6 points to 103.9, better than the 103.1 economists had forecast in a Reuters poll and building on a recovery that began in December. Business morale improved by 0.14 points to 0.23.

    “Inflation will soon flatten out, and will turn clearly positive in the second half of the year,” said Nick Kounis, head of macro and financial markets research at ABN AMR.

    “The drag from energy will ease in the coming months, while food price inflation (now unusually weak) is likely to gradually edge up as it follows developments in agricultural prices with a long lag,” he said.

    “Finally, later in the year — and more so in 2016 — the impact of the weaker euro will feed through. Overall, then we look to be in a world of ‘lowflation’ rather than deflation,’” Kounis said.

    As in previous months, the decline was mainly driven by a drop in the price of energy, which was 5.8 percent cheaper in March than a year earlier.

    Core inflation, which excludes volatile energy and unprocessed food costs, was 0.6 percent year on year, down from 0.7 percent in February and the same as in January.

    “The data will likely dilute fears that deflation could become entrenched in the eurozone with long-term debilitating growth effects,” said Howard Archer, economist at IHS Global Insight. (SD-Agencies)