Inflation in the 17 countries using the euro was lower than first estimated in January.
The EU’s statistics office Eurostat said its latest calculations show consumer prices fell 0.8 percent from December.
Year-on-year inflation rose 2.6 percent.
The feeling is that it will continue to slow as the economy contracts making an European Central Bank interest rate cut more likely later this year.
However oil prices that hit record highs in euro terms this month could slow inflation’s downward trend in the coming months, even as the region heads into recession, making an immediate interest rate cut less likely.
“We don’t expect an ECB rate cut in March,” said Fabio Fois, an economist at Barclays Capital. “I think the ECB sees that the interest rate level is about right, with energy price pressures still present in terms of higher oil prices.”
The monthly price fall was mainly due to seasonal reductions in the prices of clothes and package holidays, Eurostat said.
Overall energy prices, boosted by tensions over oil-producer Iran’s nuclear programme, jumped 2.6 percent in January against December for a 9.2 percent year-on-year increase.
Without the volatile energy prices, inflation was already at the ECB target, having fallen 1.2 percent on the month for a 1.9 percent year-on-year reading.