Euro zone inflation slowed sharply in March, a first estimate from Eurostat showed today.

This comes as an oil price war between Russia and Saudi Arabia slashed energy prices and the coronavirus pandemic brought economic activity acrossthe bloc almost to a halt.

The European Union's statistics office Eurostat said consumer prices in the euro zone 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% 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% year-on-year in March from 1.2% in February. 

Economists had expected a slowdown to 1.1%.