Yearly growth in consumer prices stood at 4.5% in May according to Statistics Estonia. Inflation was kept up by higher prices for services and food, while energy prices were a lot lower than a year earlier.

Fuels for transport were 11.4% cheaper in May than a year before, as the price of crude oil has dropped by a quarter this year. The market price of electricity has been very volatile from month to month this year. It was 150 euros a megawatt-hour in February, but then fell to close to 70 euros in subsequent months. The market price of electricity of 56 euros a megawatt-hour has been relatively cheap at the start of June compared to what it has been in recent years.

Inflation for food has however been rising steadily this year, and it reached 7.1% in May. A new factor in recent months has been an acceleration in inflation for fruit and meat products. Prices for dairy products including butter have continued their long-term upwards trend, as the farm-gate price of milk was 23% higher in April than a year earlier. Retail prices of juices fell in May for the first time in a long time, probably because prices for orange juice have fallen sharply in global markets. The price of coffee in the global market shows no clear direction, and although the price level of coffee is lower than it was at the start of the year, there is a lag before this is reflected in retail prices.

Inflation for services was 10% over the year in May. Higher administered prices contributed a substantial 4.4 percentage points of this, as the car tax came into force in January and medical services rose in price in April because hospital fees and prices for emergency medical aid were raised. Seasonal demand contributed to prices for private sector leisure services rising rapidly, as package holidays gained 20% in price and hotel accommodation was up by 12%.

Eesti Pank will publish an updated inflation forecast on 10 June.

Additional information:
Viljar Rääsk
Head of Communications
Eesti Pank
6680 745, 5275 055
Email: [email protected]
Press enquiries: [email protected]