Spanish consumer prices dip in March as ECB starts QE scheme

Spanish consumer inflation data for March re-sparked worries about deflation in the Eurozone economy despite the European Central Bank unleashing its monthly stimulus plan this month.

According to Instituto Nacional de Estadistica on Monday, consumer prices fell by a seasonally adjusted 0.7% month-on-month, compared to expectations for a decline of 1.0%. In February, consumer prices fell 1.1%.

The reading was slightly better than the 0.9% fall predicted by economists.

The fall in prices is largely on the back of weaker oil prices over the past nine months, despite improving economic fundamentals.

Spain's GDP climbed 0.7% in the final three months of 2014 and retail sales jumped 4.2% from a year earlier in January. That said, the country's unemployment rate remains stubbornly high at 23.7%.

The ECB’s plan to create inflation through its €60bn a month bond buying programme is expected to support growth future in Spain and other euro area nations over the course of the next 18 months.