Austria inflation cools to 2.7% in July as food tax cut takes effect

The VAT reduction on staples is curbing price pressures, reinforcing the easing trend seen across the eurozone periphery.

By Handelsavisen Newsroom · Automated 2026-07-31 07:17 UTC · 1 min read

Consumer price inflation in Austria decelerated to 2.7% year-on-year in July, down from 3.2% in June, according to a flash estimate from Statistik Austria.

The slowdown marks a continued easing of price pressures that have persisted since the post-pandemic surge.

The primary driver behind the moderation was a government-introduced value-added tax (VAT) reduction on selected staple foods, which took effect at the beginning of July.

The primary driver behind the moderation was a government-introduced value-added tax (VAT) reduction on selected staple foods, which took effect at the beginning of July.

This policy intervention directly lowered the cost of essential goods, providing immediate relief to household budgets and dampening headline inflation figures.

The data aligns with a broader regional trend of cooling price growth.

In neighboring Germany, consumer price inflation slowed to 2.3% in June, down from 2.6% in May, according to the Federal Statistical Office.