The decline in producer prices was largely down to energy suppliers cutting their tariffs by 0. 6 per cent from June, reversing an equivalent rise in that month.
Prices of goods leaving the eurozone's factory gates resumed their decline in July, an indication that the currency area will not soon escape a lengthening period of very low inflation that threatens to undermine its fragile economy.
The European Union's statistics agency said Tuesday that producer prices fell 0. 1 per cent from June, and were down 1. 1 per cent from July 2014.
But with the unemployment rate close to a record high, wages rising slowly, and credit from banks in short supply, consumer-facing businesses such as retailers are unlikely to raise their prices unless they face sharply rising costs, such as a hike in prices charged by manufacturers.
Eurostat on Friday said the annual inflation rate fell to 0. 3 per cent in August from 0. 4 per cent in July, its lowest level since October 2009 and well below the European Central Bank's target of just under 2 per cent.
Read more here: Business Spectator