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Data from Eurostat showed that the annual rate of inflation in the 16-country economy dropped to zero this month, down from 0.6 per cent in April.
The decline is worse than analysts' forecasts of a 0.2 per cent rise and as a result, many now expect prices could fall in the coming months.
Economist at the Royal Bank of Scotland Jacques Cailloux told the Associated Press that inflation is likely to remain below zero until October but will then rise as 2010 approaches.
"We thus do not expect the ECB (European Central Bank) to revise significantly its inflation forecasts next week," he added, something that those involved in stock market trading may wish to note.
Earlier this month, the Bank of England admitted that economic growth prospects for the UK are "unusually uncertain" due to the number of economic and financial factors that are affecting the long-term outlook.
