Unprocessed food prices fell by 0.8% versus May, alongside a 0.9% decline in the cost of energy and a 0.4% fall in the prices of non-nergy industrial goods.
Data released on Monday showed Euro zone consumer prices rose 1.3 percent year-on-year in June, in line with market expectations, decelerating form 1.4 percent in May and 1.9 percent in April.
Speculation has risen since the last meeting that the central bank might be readying markets for tighter policy at its July meeting. Analysts at Lloyds Bank expect the ECB will leave its policy rates unchanged and make no new announcements on its asset purchase programme. It is now buying around €60bn in bonds each month in an effort to push money out into the broader economy and stimulate growth, with more purchases at a slower rate expected by most economists.
At the beginning of the year Draghi had come under sustained pressure to tighten policy sooner rather than later, given a surge in inflation to the two per cent target in February.
In June 2016, annual inflation rate was 0.1% both in the European Union and the eurozone.
Draghi is also keen to avoid triggering a sell-off in Eurozone government debt akin to the 2013 United States taper tantrum, when the tapering of QE by the Federal Reserve caused panic on global bond markets.
The largest upward impacts to the euro area annual inflation came from accommodation services (+0.08 percentage points), package holidays (+0.06 pp) and tobacco (+0.04 pp), while telecommunication (-0.10 pp), social protection (-0.04 pp) and bread & cereals (-0.03 pp) had the biggest downward impacts.
Economists at JP Morgan believe the European Central Bank is "likely to signal a tapering decision in September", with the possibility of "an opening statement that removes the "easing bias" on QE or points to upcoming forecasts as a guide to assessing asset purchases beyond this year".