Revised figures from the Eurostat agency show prices across the 19-nation single currency area showing inflation falling from 1.3% in June and from 2.2% a year earlier.
Draghi also points to other major risks, including geopolitical tensions as well as 'the possibility of a hard Brexit'.
Manufacturing in the 19-nation currency bloc has been on a downward trajectory since the start of last year.
Aside from rate cuts, other moves could include restarting 'quantitative easing' purchases of government and corporate debt.
Oil prices rebounded gently, having tumbled the previous day on worries over a slowing global economy and political instability in key producer Venezuela.
Eurozone stocks held onto their gains in afternoon trading, while the euro clawed back ground against the dollar.
Officials are putting faith in domestic resilience and say temporary factors that dragged on the third quarter should fade.
The euro rose 0.5% to $1.1369, away from recent lows of $1.1302 and capping three consecutive trading session losses, pressured by weak euro zone data as well as Italian budget worries and Brexit woes.
Gross domestic product in the 19-country single currency area rose just 0.2% from July to September, the Eurostat agency said, compared with 0.4% in the preceding quarter.
Eurozone's bailout fund director Klaus Regling was speaking just before a European source told AFP the European Commission, the EU's executive arm, has rejected the budget proposed by Italy's populist leaders.
The Italian coalition has set a deficit target of 2.4% of economic output for 2019, tripling the previous goal for the heavily indebted nation.
Markets fret that Italian banks, saddled with bad loans, and a massive amount of Italian government bonds, could face crippling losses if debt prices keep tumbling.
Eurostat said 16.82 million people were unemployed across the eurozone in July, down 82,000 on the previous month.
That translates to nearly US$500 billion in lost annual output based on IMF projections, the equivalent of subtracting an economy the size of Thailand.
The Bank of Greece said the Eurogroup’s decision on debt relief ensures the sustainability of Greece’s debt “at least in the medium term”.
Europe's twin engines of EU unity, France and Germany make up nearly half of the eurozone economy, and a compromise by them usually leads to a deal among the single currency's 19 member countries.
The Netherlands and Poland were the main critics of the reforms.
Yields on government bonds in Germany, France, and Spain were only marginally higher.
The governing accord agreed to by the Northern League and 5-Star Movement is in direct opposition to European Union policies.
Negotiators are also trying to draw up a plan for an EU rainy day fund as well as aid to help countries adopt economic reforms.
French President Emmanuel Macron heads to Berlin Thursday for talks with Chancellor Angela Merkel, hoping to breathe fresh life into his grand vision for EU reforms in the face of growing German resistance.
Less than a year after his stunning election win on a pro-EU platform, Macron's hopes of pushing through his bold post-Brexit reforms with Chancellor Angela Merkel by his side are facing a cold dose of reality.