Austria’s annual inflation rate eased to 2.7% in July 2026 from 3.2% in the previous month, preliminary estimates showed. This marked the lowest reading since February, largely driven by lower food prices. Food, alcohol, and tobacco prices fell 0.1% year-on-year, down from 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 slowed to 0.8% from 1.1%, while services remained the main driver of inflation, with prices rising 4.4%, unchanged from June. In contrast, energy price growth accelerated slightly to 5.7% from 5.4%, as fuel and heating oil prices increased more strongly in the second half of July. On a monthly basis, consumer prices declined 0.1% in July, following a flat reading in June.