Estonia's consumer price index (CPI) growth accelerated to 3.5% in annual terms in January from 3.4% y/y the previous month, data from Statistics Estonia showed on February 7.
Estonia begins 2018 with an inflation rate sustained at the level seen throughout 2017, when overall price growth came in at 3.4%, a major pick up compared to inflation of just 0.1% in 2016.
The annual growth in January was driven by rising prices of food, which expanded 5.7% y/y. Growing prices of alcohol and tobacco also contributed with a hike of 11.3% y/y, as did the prices in the transport segment, which grew 3.6% on the year, including an annual growth of 12.8% in petrol prices and a 12.1% y/y expansion in diesel fuel. Prices in the housing segment grew 3% y/y.
Overall, price growth of goods came in at 4.4% y/y in January, while services were 1.8% more expensive than in January 2017.
January saw the Estonian CPI in positive territory for the eighteenth consecutive month after deflation dominated between May 2015 and July 2016. In monthly terms, consumer prices grew 0.4% in January, compared to a fall of 0.3% m/m the previous month.
CPI is expected to expand 3.1% in 2018, according to the European Commission’s forecast that appeared on February 7. The most recent forecast from Eesti Pank is 3.2%.