Falling energy prices has helped remove the heat from eurozone inflation and gave the European Central Bank breathing space to cut interest rates.
The eurozone consumer price index hit a 16-month low of 2.4% in June.
Eurostat, the official European Union statistics organisation, said energy prices dropped 1.7% in the month and consumer prices dipped across 10 of the bloc’s members from April.
Food, alcohol and tobacco went up 0.3%.
As a result, the ECB had room to cut interest rates to a record low of 0.75% as eurozone inflation is slowing faster than forecast.
Inflation for the entire European Union averaged 2.6% – the highest is 4.4% in Malta and Estonia, while the lowest is 0.9% in Sweden.
Meanwhile, latest figures on the balance of trade for the eurozone and wider European Union give little source for relief from the financial crisis triggered by huge sovereign debts in Spain, Italy, Cyprus and Greece.
The eurozone had a trade surplus of €6.9 billion in May, compared with a €1.2 billion deficit 12 months ago, but closer inspection of the figures shows imports dropped 0.9% – showing a decrease for three months in a row.
Many analysts believe the eurozone financial problems are reaching an end game as a record 17 million people are out of work in the euro zone, while millions more in work face frozen or reduced salaries.
The result is consumers do not have confidence to spend and in many cases are stretching their finances to make ends meet.
This is pushing down demand for goods in the shops.
The lack of spending in Europe is rippling out to other nations, as growth slows down in China and the US stagnates.
