New figures suggest the bloc ended 2016 on a high
Annual inflation in the euro zone hit its highest level since 2013 as it climbed by 1.1% in December as energy prices rose.
That's a significant increase on the 0.6% rate recorded in November.
This was above a predicted rate of 1% - this is the first time that the bloc's inflation rate passed 1% in over three years.
Core inflation - which removes changeable energy and food prices - showed a more modest increase, rising from 0.8% to 0.9%.
IHS Markit's euro zone PMI rose to 54.4 in December - that's 0.5 higher than the previous month. Any figure above 50 indicates growth.
Markit's chief business economist Chris Williamson commented, "The final PMI data signal an even stronger end to 2016 than the preliminary flash numbers, though whether this provides a much-needed springboard for the euro area's recovery to gain further momentum in 2017 remains very uncertain."
"Much depends on political events over the course of the next year," he continued.
Meanwhile, inflation in Germany has also increased at its fastest pace in three years - again this was largely due to increases in energy costs.
This is good news for ECB policy makers who have been trying to stimulate economic activity across the monetary union.
It has committed to continuing its quantitative easing programme throughout 2017 - but it will pump money into bond markets at a lower-rate after its original QE commitment ends in March.