Price growth remains slow, leaving the door open for another interest rate cut by the Reserve Bank.
The consumer price index (CPI), a key measure of inflation, rose 0.2 per cent in the March quarter for an annual rate of 1.3 per cent.
Cheaper petrol was a key factor in the figures, which met market expectations.
The annual rate is also well below the RBA's target range of two to three per cent.
NAB senior economist David de Garis said the latest figures will not change the RBA's stance on interest rates, but believes a cut may be a few months further down the track than others expect.
"I don't think its going to take the RBA's easing bias away, there's still a chance they will cut in May," he said.
"It doesn't suggest there's any undue economic softness, so it does reduce the chance of a May interest rate cut by a little bit, on top of the other economic numbers that we've had over the past couple weeks."
Underlying inflation, which strips out the effects of volatile price movements, rose 0.6 per cent in the March quarter for an annual rate of 2.35 per cent.
Even though underlying inflation is also low, there are no signs of it slowing too much further as the year goes on, Mr de Garis said.
JP Morgan economist Ben Jarman said lower petrol prices dragged the headline number lower.
"This was the quarter where the petrol price fall was going to be most intense and that was pretty obvious in the numbers today," he said.
"We don't feel like there are any bellringers in this report."
It leaves plenty of scope for the RBA to cut interest rates in May, he said.
"The story for the RBA is the same as it has been for quite some time, which is that they have scope to cut if they want to, the question is, what's their willingness to do it?" Mr Jarman said.
"We think it's going to come down to whether the RBA feels they need to cut their growth forecasts in their next statement on monetary policy.
"You've got this big negative shock from the renewed fall in iron ore prices and that's the kind of thing which the RBA minutes said could lead them to downgrade their forecasts."
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