According to the latest figures released, Spanish national consumer prices fell its fastest rate in four-and-a-half years during the month of March.

The preliminary data released yesterday indicated that the eurozone might be facing the risk of deflation in the euro zone. Consumer prices fell 0.2 per cent in Marchcompared to the same period of the previous year. National Statistics Institute INE said prices of food and drink fell. The rate of consumer prices was the lowest reading since October 2009. Spanish retail sales fell 0.5 per cent in February as consumers continued to stay away from stores as the Spanish economy records gradual recovery.

The European Central Bank says there is no threat of deflation. 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 inflation to 0.9 per cent.