Eurozone data to be released this week is expected to show that inflation slowed slightly in June from a peak of 2.5 percent reached in May on surging oil prices, economists said.
Final eurozone consumer prices data for June to be published on Friday are likely to confirm Eurostat's so-called flash estimate of a 2.4 percent inflation rate, following the 2.5 percent reading in May.
And national data is to show inflation slowed by 0.2 percentage points in both Germany and France, while Italian and Spanish inflation rose fractionally, economists said.
A decline in oil prices will be the main reason for the general slowdown in headline inflation, they said.
This was already reflected in preliminary figures, so particular attention next week will be paid to core inflation data, said Ed Teather of Swiss bank UBS.
Eurozone core inflation has been stuck at 1.8 percent since February and is expected to remain at this level again in June.
"We expect core inflation to remain unchanged again, confirming the lack of underlying inflationary pressures in the economy," said Julien Seetharamdoo of Capital Economics.
The European Central Bank has warned that inflation will probably remain above two percent for the remainder of the year, and possibly into 2005, if oil prices stay around current levels.
But economists said they expect oil prices to ease further, with the result that inflation will drop below the ECB's two-percent price stability ceiling before the end of this year.
"Going forward we expect a gradual decline in oil prices to push headline inflation back below two percent by the end of 2004 without any major change in the core rate," said Holger Schmieding of Bank of America.
Seetharamdoo said the Organisation of Petroleum Exporting Countries is likely to confirm it will increase output quotas from August and this would relieve pressure on oil prices.
France and Italy are both due to report May industrial production data, but neither is expected to match the strong performance of Germany, which posted a forecast-beating 1.1 percent rise in output.
French output could rebound 0.5 percent after the 0.4 percent decline of April, but Italian production is expected to remain flat.
Meanwhile, France is still faring worse than Germany, with French industrial activity picking up only slowly, said Emmanuel Ferry of Exane.
Eurostat's second detailed release on eurozone first quarter gross domestic product (GDP) is likely to confirm the previous estimate of a 0.6 percent quarter-on-quarter growth rate.
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