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Eurozone inflation rate drops further to 0.5 percent, strengthening deflation worries

Official data show the eurozone's inflation rate in March decreased for the third consecutive month to a new low of 0.5 percent, a development likely to add pressure on the European Central Bank to ease its monetary policies.

The preliminary estimate for the 18-country currency bloc published by the European Union's statistics agency Monday was down from February's annual rate of 0.7 percent.

Eurostat says the core inflation rate — excluding volatile food and energy costs — also dropped, from 1 percent in February to 0.8 percent in March.

The ECB aims to keep inflation just below 2 percent, but the data raise the prospect of falling prices, or deflation, which can choke off growth as consumers and businesses delay purchases in hopes of getting better bargains down the line.

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