Data from Statistics Estonia show that consumer prices were 4.6% higher in October than a year earlier, which is the lowest rate of increase since May. Without the effect of new taxes and tax rises this year, inflation would have been 1.9% in Estonia in October, which is similar to the rate across the whole of the euro area. The cost of the consumer basket was unchanged from September.

Prices for food, which is quite a large part of the consumer basket, fell over the month for the second month in a row, and the fall was evident in almost all groups of food products. The fall in price was to some extent seasonal, particularly for fruit and vegetables. Prices for several commodities traded on global markets, like cocoa and sugar have stabilised or fallen, and the impact of that will pass into consumer prices moving forwards.

The manufactured products that rose most in price over the year were household furnishings, while prices fell most for clothing and footwear and for electronic goods like computers and televisions. Inflation for manufactured goods has been held down of late by the appreciation of the euro, which has particularly pulled down the prices of goods imported from outside Europe, notably from Asia.

Services were the main driver of the rise in prices in the consumer basket in October, with air tickets making a major contribution as prices were as much as 46% higher than in September. Prices for air tickets are very volatile though and can be steered by promotional campaigns and by the seasonality of demand.

Electricity was a little more expensive in October than in September, but the price of energy in the consumer basket was lower than a year previously because motor fuels were cheaper. Petrol station chains started to cut prices one after another in September, and petrol prices remained at the lower level in October. This also helped restrain the general rise in the price of the consumer basket. The fall in the price of motor fuels pulled the overall figure for inflation in October down by more than half a percentage point. Fuel prices have however risen a little in early November. If fuel prices climb back in November to where they were before the price war, they will push up the cost of the consumer basket in monthly comparison.

The forecast released by Eesti Pank in September expects inflation for the whole year will be 5.3%. The next forecast will be published in early December.

For further information:
Hanna Jürgenson
Communications officer
5692 0930
Email: [email protected]
Press enquiries: [email protected]