FX.co ★ Austria Inflation Rate Eases to 5-Month Low

Austria’s annual inflation rate slowed to 2.7% in July 2026, down from 3.2% in June, according to preliminary estimates. This was the lowest rate since February and was mainly driven by falling food prices. The combined category of food, alcohol, and tobacco recorded a 0.1% decline in prices year-on-year, compared with a 1.5% increase in June, partly reflecting the reduction in VAT on basic foodstuffs from 10% to 4.9% effective July 2026. Price growth for manufactured goods also eased, rising 0.8% after 1.1% in the previous month. Services, however, remained the main source of inflationary pressure, with prices up 4.4% year-on-year, unchanged from June. By contrast, energy price inflation picked up slightly to 5.7% from 5.4%, as fuel and heating oil prices rose more sharply in the second half of July. On a monthly basis, consumer prices fell 0.1% in July, following a flat reading in June.