Consumer prices in July were were down 1 per cent from May on average.
In May 2012, inflation was 3.9 per cent, the highest since April 2009, dipping to 3.8 per cent in June.
In July, the prices of goods declined 1.3 per cent, while those of services went up 0.3 per cent on the month.
According to Raiffeisenbank Austria analysts, domestic demand is weak and there is a lack of economic recovery, but the value added tax increase and the higher electricity and gas prices will be reflected in the annual growth of consumer prices by the end of the year. Although their average growth in the first seven months was 2.5 per cent, the average annual inflation rate will be around three per cent, they predict.