Estonia's consumer price index (CPI) grew 3.6% in annual terms in July, data from Statistics Estonia showed on August 7.
The reading showed price growth picking up speed by a margin of 0.7pp compared to June, as the rate of growth of the CPI pushed to its highest level since June 2013. At odds with its peers in the region, Estonia has seen its inflation remain elevated through the year. Elsewhere in Central and Eastern Europe, the commodities-driven surge in prices around at the turn of the year has now faded signficantly.
July saw Estonian CPI in positive territory for the twelfth consecutive month, after deflation dominated between May 2015 and July 2016. In monthly terms, consumer prices grew 0.7%.
As in June, the annual increase was primarily driven by rising prices of food and non-alcoholic beverages, which grew 5.3% y/y. An 8.5% y/y rise in the price of petrol and a 9.5% y/y expansion for diesel also contributed. Prices in the transport sector grew 4.3% overall.
Estonian CPI finished last year at just 0.1%, below the prediction of 0.5% from the International Monetary Fund and the 0.8% forecast by the European Commission. In line with expectations that global inflation would return with a bang in 2017, Estonia's CPI is on track to see a serious acceleration.
The pace is set to be higher than the average for the Eurozone, primarily because of rises in excise duties, suggests Eesti Pank. The central bank anticipates average inflation for 2017 at 2.8%, while the European Commission is expecting price growth of 3.3%.