Prices of goods decreased by 0.9 %, while prices of services grew by 2.7 %.
Month-on-month the average level of consumer prices actually decreased by 0.3% compared to June's figure.
Prices of goods decreased by 1.1 %, whereas prices of services rose by 1.6 %.
In July, the greatest pressure on the consumer price level was exerted by the drop in prices of clothing and footwear, alcoholic beverages and tobacco products, food and non-alcoholic beverages, as well as an increase in the prices of goods and services related to housing, prices in the communication group, health care, and prices in the miscellaneous goods and services group.
Along with the start of seasonal sales, prices of garments decreased by 9.9 % and prices of footwear dropped by 11.8 %.
Among other commodity groups, the most significant drop was recorded in the prices of fuels for transport (of 1.1 %), whereas growth was observed in the prices of passenger transport by air and non-durable household goods.
Commenting the data, Citadele Bank economist Martins Abolins said the deflationary period could be nearing its end.
"In July, consumers again had the opportunity to feel the last of the sharp decline in oil prices having a positive impact on their wallets... but this is probably the last significant reduction in consumer prices experienced over the last two years during the fall in oil prices."
With oil prices rising again, the inflationary trend would likely be upward in future months, he said.