The I.M.F. praised the European Central Bank for measures it has taken to combat a decline in bank lending. But the directors of the I.M.F. said the E.C.B. should be prepared to go further if necessary, buying large amounts of government bonds to push down borrowing costs and to increase confidence.

In a separate blog post, the I.M.F.'s two top officials for Europe said that such asset purchases would be effective in raising both the supply of credit and demand for it, while helping to raise inflation from levels considered dangerously low. Contrary to some other commentators, they said they did not see a big risk that so-called quantitative easing would create asset bubbles.

“So far, credit is still contracting in the euro area,” Reza Moghadam, director of the I.M.F.'s European department, and Ranjit Teja , the deputy director, wrote in the blog post. “There is no evidence of housing/asset bubbles.”

The biggest drop in industrial production was in Portugal, where production fell 3.6 percent, according to the figures. The continuing problems in the country, one of the hardest hit by the eurozone crisis, sent shock waves through global financial markets last week after the parent of one of its banks, Banco Espírito Santo, missed payments on short-term debt.

Production during May declined in all of the eurozone’s largest economies, the data showed. It fell 1.4 percent in Germany, a center of automobile and machinery manufacturing that has largely escaped the worst of the economic crisis, while output dropped by 1.3 percent in France, by 1.2 percent in Italy, and by 0.9 percent in Spain, Eurostat said.

“One could make the case that the tentative recovery in the euro area has come to an abrupt halt,” analysts at Credit Suisse said in a note on Monday. “If true, the implications — for asset markets, the global economy, monetary policy, and social and economic stability in Europe — would be considerable.”

The Credit Suisse analysts said that they still expected the eurozone recovery to continue as demand from elsewhere in the world increases, and because of increases in consumer demand within Europe.

“There’s no evidence that the fundamentals of recovery have changed,” they said.