Estonia's consumer price index (CPI) grew 2.8% in annual terms in March, data from Statistics Estonia showed on April 7.
The reading shows inflation easing 0.6pp compared to the result in February, which was the highest since July 2013. As in many other economies in the region, the gain in Estonian prices around the turn of the year is being driven by the stabilisation of global oil prices and erratic food markets, making the rapid price rises unlikely to persist. Neighbouring countries have also seen the CPI surge reduced in March.
March saw the Estonian CPI in positive territory for an eighth consecutive month, after deflation dominated between May 2015 and July 2016. In monthly terms, consumer prices gained 0.3%.
The annual increase in March was primarily driven by rising prices of motor fuels, Statistics Estonia notes. Prices in transport rose 6.6% y/y overall, while within the segment, petrol prices increased 18.5% y/y and diesel fuel became 19% more expensive on annual basis. Food prices grew 4.1% on the year overall.
Estonian CPI finished last year at just 0.1%, below predictions of 0.5% from the International Monetary Fund or the 0.8% forecast by the European Commission.
In line with forecasts that global inflation will return with a bang in 2017, Estonian's are likely to see a serious acceleration in prices this year. The pace is set to be even higher than the average for the Eurozone, suggests Eesti Pank, primarily because of rises in excise duties. The central bank plots average inflation for 2017 at 2.8%, the same as the European Commission.