Prices in the 16 countries that use the euro fell on an annual basis for the second straight month in July and by more than previously anticipated, official figures showed Friday.
The European Union's statistics office Eurostat said consumer prices in the euro zone fell by 0.7 percent in July from the previous year, 0.1 percentage point more than it had previously estimated and ahead of June's 0.1 percent fall. The monthly decline was also 0.7 percent.
Eurostat said the biggest drop was recorded in Ireland, which saw prices slide 2.6 percent in the year to July.
It said a 5.5 percent decline in transport cost, related to lower year-on-year energy prices, was the main influence behind the further fall in overall prices. A year ago, oil prices were trading at an all-time high of around $147 a barrel, compared with the July average rate of around $65.
The only members of the euro zone to post rising prices in the year to July were Greece, Malta, Slovakia and Finland.
Germany, the euro zone's largest economy, saw prices fall by 0.7 percent in the year to July.
Friday's figures are unlikely to cause too much concern at the European Central Bank, which has predicted a short period of negative inflation before the downward pressure coming from oil prices disappears as last year's sharp increases drop out of the annual comparison.
As a result, outright deflation — where prices fall consistently over a period of time and can cause a further downturn in the economy — is not the consensus view both within the markets and at the European Central Bank.