Austria’s July inflation estimate falls to 2.7% as food prices ease

Austria’s annual inflation rate was expected to ease to 2.7% in July from 3.2% in June, according to a flash estimate released Friday by Statistics Austria.

The agency said lower food prices helped drive the decline. A cut in value-added tax on basic foodstuffs from 10% to 4.9%, effective July 1, likely contributed to the drop.

Prices for food, tobacco and alcohol fell 0.1% from a year earlier in July, while manufactured goods prices rose 0.8%. Services inflation held at 4.4%, and energy prices rose 5.7% as fuel and heating oil became more expensive in the second half of the month.

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