Germany's Federal Statistical Office (Destatis) reported on Thursday the country’s consumer price index (CPI) is expected to decrease 0.5 m-o-m in July after increasing 0.6 percent m-o-m in the previous month. This represents the biggest monthly decline since  January.

On the y-o-y basis, Germany’s inflation rate is seen to edge down 0.1 percent this month, following a 0.9 percent advance in June. This marks the first month of deflation since April 2016.

Economists had predicted inflation would drop 0.2 percent m-o-m but increase 0.2 percent y-o-y in July.

According to the report, food price growth decelerated to 1.2 percent y-o-y in July from 4.4 percent y-o-y in June, while energy prices fell 6.7 percent y-o-y after a 6.2 percent y-o-y drop in the previous month. Services costs rose 1.2 percent y-o-y in July, following a 1.4 percent y-o-y gain as in June.

Meanwhile, the harmonized index of consumer prices for Germany (HICP), which is calculated for European purposes, is expected to fall 0.5 percent m-o-m and to be flat y-o-y.