The European Central Bank (ECB) has said that it is concerned over a sudden fall in the eurozone inflation indicating that the bank might have to take fresh policy action to address the situation.

The regional central bank has to take measures to ensure that investors are not concerned over deflation risks and support a weak recovery in the Eurozone. Eurozone Inflation slowed this month to 0.7 per cent from 0.8 per cent in December. Market analysts were expecting a rise in infaltion to 0.9 per cent.

The inflation had fallen to the same level in October 2013 and the ECB hadrespondedby cutting its interest rates to record lows. The easing prices helped reduce the inflation much lower than the ECB target of just under 2 per cent. This may raise concerns that the region is falling back into deflation.

Christine Lagarde, the head of the international Monetary Fund, has said that the global economic growth is expected to rise in the coming year. She noted that the growth in the global economy was strengthening but also warned that the growth still faces risk from deflation.

ECB policymakers are to meet next Thursday and the matter is expected to discussed.