Estonia's consumer price index (CPI) dropped 0.2% y/y in March, data from Statistics Estonia showed on April 7. The reading shows deflation running virtually uninterrupted for 16 months now, with only a brief break in May.
At the same time, the pace of deflation slowed in March compared with February’s 0.5% y/y drop. In monthly terms, consumer prices grew 0.8%, picking up speed on the 0.7% expansion seen the previous month.
As throughout the past year or more, falling prices of fuel drove the annual drop in March, decreasing 11.6% on the year. Of other segments that had a major influence on the index in March, heat became cheaper by 11%, while alcohol beverages became 6% more expensive. Food prices grew 1.2%.
Despite deflation showing little sign of abating, Estonian CPI is predicted to come in at 1% across 2016, according to the European Commission’s winter economic forecast.