Annual inflation in the eurozone dropped to 2.5 percent in July from 2.7 percent in the previous month, the European Union's (EU) statistical office Eurostat reported on Wednesday.
But the key index was still well above the two percent ceiling preferred by the European Central Bank (ECB) to maintain price stability.
Monthly inflation was -0.6 percent in July.
As for 27-nation EU, annual inflation rate was 2.9 percent in July 2011, down from 3.1 percent in June, July's monthly inflation rate was -0.5 percent.
The lowest annual rates in July were observed in Ireland (1.0 percent), Slovenia (1.1 percent) and Sweden (1.6 percent), and the highest in Estonia (5.3 percent), Romania (4.9 percent) and Lithuania (4.6 percent).
As for eurozone, main components with the highest annual rates in July 2011 were transport (5.5 percent), housing (5.0 percent) and alcohol & tobacco (2.9 percent), while the lowest annual rates were observed for clothing (-2.9 percent), communications (-1.6 percent) and recreation & culture (0.4 percent).