Eurozone inflation rises to 0.3% in May

Inflation in the eurozone climbed to 0.3 percent in May, official data showed on Tuesday, further pulling away from declining prices and reviving hopes of economic recovery in Europe.

The rise in consumer prices came after zero percent inflation in April, with low energy costs still impacting the cost of living in the 19-nation eurozone, the EU statistics agency Eurostat said.

The return to inflation is the first in five months and will we welcomed by the European Central Bank, which in March embarked on a massive bout of monetary stimulus to fight falling prices in the eurozone.

The eurozone suffered four-months of deflation earlier this year, causing widespread worry that the single currency bloc was entering a dangerous spiral of falling prices and a stalling economy.

Economists fear deflation almost as much as rampant inflation because shoppers tend to put off purchases in the belief they may be cheaper in the future. This leads to ever weaker demand, slowing the economy and pushing up unemployment.

The rise in prices was fueled by the eurozone's key service sector, up by 1.3 percent, followed by food and beverages, up 1.2 percent.

Energy prices continued to tumble however, but at a slower pace of negative 5.0 percent, slower than the negative 5.8 percent in April.

"This increase was stronger than widely expected, even if inflation is hardly racing ahead," said Howard Archer, chief European Economist at IHS Global Insight.

"Renewed dips into deflation for the eurozone are looking increasingly unlikely with the risks diluted by a firming in oil prices from their January lows, the weakness of the euro and improved eurozone economic activity," he said.