Inflation in October caused by dairy and cereal products
Martin Lindpere, Eesti Pank, economist
In October, price level in Estonia increased again due to the price rise of food. According to Statistics Estonia, the cost of the consumer basket grew by 0.6% in October and by 4.7% year-on-year.
The price of dairy and cereal products increased the most, by 7.2% and 6.6%, respectively, month-on-month. Excluding food, the cost of the consumer basket changed very little, being more in line with the current macroeconomic position.
Food price rises in the global market have rapidly passed through to consumer prices in Estonia. Since the price hike of commodities has been slowing lately, Estonia's consumer prices are expected to stabilise from now on. However, current market expectations will not allow the price of most of food products to decline in the global market.
Since higher expenditure on food will leave households with less money to spend on other goods and services, the latter are likely to experience downward pressure on prices.
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