Annual inflation of the eurozone is expected to edge down to 2.8 percent in December last year, according to Eurostat, the statistical office of the European Union (EU) Wednesday.

The inflation rate in the 17-nation single currency area for December was down from 3 percent registered in the previous three months, according to Eurostat.

Despite the decline, inflation in the eurozone remains higher than the European Central Bank (ECB)'s target of keeping price increases at below 2 percent.

However, the excessive inflation has not stopped the ECB from cutting interest rates by a quarter of a percentage point twice in the past two months to 1 percent with an aim to stimulate the economy.

Analysts said the first decline in the past four months of the eurozone inflation rates may give the ECB room to lower borrowing costs further as the economy is on the brink of a recession.