Inflation in April was strongly influenced by external factors
Ülo Kaasik, Head of the Monetary Policy Department of Eesti Pank
In April, the price growth continued to be volatile with the prices increasing by 0.5% compared with the previous month. According to the flash estimate, the level is similar to the price increase in the euro area. The year-on-year increase amounted to 2.9%.
A part of the price growth resulted from the lagged impact of increase in oil prices, as motor fuel and thermal energy prices increased.
Food prices increased considerably, supported by growth in global food prices. Also, a seasonal increase in the prices of fresh vegetables has been recorded.
In April, activity in mobile communication services market grew and part of the unexpected increase in voice services prices recorded in March fell back. In April, mobile communication services prices fell by almost 6%.
The fall in services prices reflects subdued domestic price pressures due to weak demand and no change is expected in the near term. According to the forecast of Eesti Pank, the average price increase in 2010 is expected to be 1.3%.
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