Estonia’s CPI inflation moderates to 3.4% y/y in July.

By bne IntelliNews August 7, 2013

CPI inflation amounted to 3.4% y/y and -0.1% m/m in July 2013 (3.8% y/y and 0.5% m/m in June), Statistics Estonia reported. Prices growth moderated in July. Previously accelerating in February to 3.7% y/y on high food prices, consumer prices declined for two consecutive months and rebounded slightly in May.

To remind, average consumer price increase for 2012 overall stood at 3.9% y/y, while in 2011 average inflation was 5%, in 2010 average inflation was 3% vs. 0.1% deflation in 2009 and 10.4% inflation in 2008.

Consumer price inflation in July was mostly influenced by housing expenditures that increased by 8.4% y/y and gave about 40% of overall increase. Housing prices, same as in previous months, were influenced by 80% y/y hike in electricity prices (electricity prices jumped in the beginning of 2013 after total de-regulation of the electricity market). Food prices growth of 5.2% y/y accounted for about 40% of consumer prices’ growth in July. Food inflation was due to higher prices on vegetables.  

Goods were 3.1% and services 4% more expensive y/y, while regulated prices went up by 1.1% and non-regulated prices by 4.2% y/y in July.

The Bank of Estonia last month commented that electricity price was to blame for accelerating inflation figures in May-June. At the same time the central bank believed that risks to price stability increased both externally and domestically. Improved outlook on external growth in H2/13 might raise the prices of imported raw materials. Domestically higher labor costs in H1/13 could pressure prices upwards, especially through services. July’s data did not yet confirm these concerns.

Last month the CB reiterated its 3% average HCPI forecast for 2013 (revised downwards in June from previous 3.6%).

Related Articles

Latvia to probe tram tender awarded to Russian-controlled Railvec

Latvia’s state security service, the Constitution Protection Bureau (SAB), plans to scrutinise a tender to deliver trams to the country’s second-largest city won by a Russian company with ties to ... more

Finland’s Hesburger first Western burger chain to open in Iran since Islamic Revolution

Finland’s Hesburger has opened its first branch in Iran, becoming the first Western burger chain to set up in the country since the 1979 Islamic Revolution. It is located in the Tehranpars district ... more

Finland gives final nod to construction of Nord Stream II

Finland has issued a second and final permit for the construction of the controversial Nord Stream II pipeline that is to pump gas from Russia directly to Germany via a Baltic Sea route, the Regional ... more