Downward pressures came from prices of food and non-alcoholic beverages (slowed to 0.5 percent), mainly due to fresh fish, fruit, vegetables and oils.
Communication prices dropped the most on the year (-6.9 percent), followed by cost of recreation and culture (-2.3 percent) and transport prices (-1.3 percent).
On a monthly basis, the inflation rate accelerated to 0.2 percent, boosted by a 4.2 percent rise in clothing and footwear prices.
Spanish EU-harmonized consumer prices fell 0.2 percent year-on-year, unchanged from a 0.2 percent fall in February.
Core inflation, which strips out volatile food and energy prices, was 0.0 percent year on year in March, compared to a reading of 0.1 percent a month earlier.