Inflation in the eurozone fell more sharply than expected to 2.9% in October, according to the EU's statistics office.
With the Christmas shopping period just weeks away, Eurostat announced Tuesday that consumer prices in the euro area had reached their lowest level in more than two years, down from 4.3% in September.
The main cause was the double-digit drop in fuel prices which eased by 11.1%.
The better-than-expected inflation data is getting closer to the 2% target set by the European Central Bank, with its policy of higher interest rates contributing to the welcome calm.
But at the same time, growth disappeared as output shrank after months of stagnation.
Germany, the largest of the 20 countries using the euro, saw its economic output fall by 0.1%, while France, the second largest economy, recorded growth of just 0.1%.
Paolo Gentiloni, the EU Commissioner for the Economy, reacted to the latest inflation and GDP data on X, formerly known as Twitter, by saying that "a transition phase in which spending caution and investment support is needed".