Inflation slowed in January
Data from Statistics Estonia show that yearly inflation slowed in January to 2.7%. Preliminary assessments show that inflation in the euro area stood at 1.4% at the same time.
Inflation was notably lower in January than in the closing months of last year. This was mainly because of the low oil price on global markets, which left prices for motor fuels 4.7% lower than a year earlier. Inflation continued to be held up by the price of electricity, which rose by 18% over the year. The market price for electricity rose sharply in the summer on the Nordic exchange and has remained high since then. The price of electricity provided 0.6 percentage point of the inflation in the consumer basket in January.
Eesti Pank forecasts that inflation will average 2.6% in 2019. Prices will rise more slowly this year than in several previous years partially because there will be less impact from rises in excise, which have raised the price level in Estonia by 2.2% over the past three years. Inflation was also lifted substantially by higher global prices for food commodities in the past few years because the weather has been unfavourable for agriculture. The rate of inflation for food products has slowed gradually in recent months though.
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