By Francesco Canepa and Francesco Guarascio
FRANKFURT/BRUSSELS (Reuters) - Euro zone consumer prices halted their slide in March, data showed on Thursday, giving hope to the European Central Bank that its efforts to boost stubbornly low inflation will pay off once energy prices stabilise.
Inflation was zero year-on-year, the European Union's statistics agency said, revising up its earlier estimate of a 0.1 percent decline.
The largest boost to the index came from restaurants and bars, package holidays and rent, Eurostat said.
A 0.2 percent drop in inflation in February had stoked concerns that the currency bloc was heading for a new period of falling prices, a sign of weak economic growth, despite the ECB's aggressive stimulus measures.
March's reading may go a small way towards easing those concerns and rekindling ECB hopes that inflation will start moving closer to its target of just below 2 percent once a recent small rebound in the market price of crude oil starts filtering through to the real economy.
"When we get the base effect from oil prices in the second half of the year the whole debate around the ECB may change," Anatoli Annenkov, an economist at Societe Generale (PA:SOGN), said.
"It will become easier for the ECB... to argue its actions are having some effect."
The ECB, which is buying 80 billion euros worth of assets per month to boost consumer prices, expects inflation to average 0.1 percent this year, 1.3 percent next and 1.6 percent in 2018.
Real energy prices, such as gasoline prices and heating oil, tend to lag financial markets by several months and, for now, they remain a drag on the index.
Eurostat's energy prices index fell 8.7 percent in March, its steepest fall since September 2015.
Core euro zone inflation, which excludes food and energy prices, accelerated to 1.0 percent from 0.8 percent in February.