The price of goods in the eurozone in January experienced their largest fall in the history of the euro.
Consumer prices in the eurozone were 0.6% lower than a year earlier, following deflation of 0.2% in December, according to a preliminary estimate by Eurostat.
The eurozone has only once before experienced deflation at this level and that was in July 2009 when the area first went into recession following the financial crisis.
A major factor to falling prices is the cost of energy, with oil prices down almost 60% on the middle of last year. Energy prices dropped 9% in January.
Eurostat also said that it expected prices to fall for food, alcohol, and tobacco as well as non-energy industrial goods.
Only the prices of services are expected to have gone up.
The situation has renewed fears that the situation is not temporary and that the euro area could enter a prolonged period of deflation.
A spokesman for the European Commission tried to dampen fears by noting that the current period of falling prices did not signal a "self-perpetuating" deflationary spiral.
Lower prices are, of course, good for the consumer but the risk is that people will delay buying goods in the hope that prices will fall further. This forces companies to cut prices and wages and eventually staff.
Lower wages and profits lessen the taxes governments receive and this pushes up government debt as a proportion of GDP.
Optimism, however, was raised by labour market figures which showed that overall unemployment in the region declined to 11.4% in December.
