Prices for motor fuels lifted CPI inflation in May
Economist at Eesti Pank
- Energy goods, meaning motor fuels, electricity and solid fuels, rose most in price in the year to May
- Food price inflation is coming down, albeit slowly
- The general slowing of inflation that started at the end of last year has continued
The rise in the consumer price index accelerated to 3% in May as prices rose for energy goods. The largest rise over the year was of 14% in the price of motor fuels. The other main driver of inflation was higher food prices, where the biggest impact continues to come from the rise of 11% in prices for alcohol and tobacco products. Inflation for all other food products was 2.9% in May and is coming down gradually. The growth in the prices of fruit and vegetables has been slower than the average for food products.
Higher prices for services pushed core inflation up to 1%, though the price level of manufactured goods did not change over the year. As in several previous years, prices for communications were cheaper in May than in April, though the fall was smaller than usual this year at 2.2%.
The downwards trend of inflation that started at the end of last year has continued as the median inflation of the consumer basket fell from 2.9% to 2.4% in May. Median inflation, which is the rate where half the consumer basket has higher inflation and half has lower, is less sensitive to sharp fluctuations in the prices of individual items in the basket than the consumer price index as a whole is. That the median price growth is lower than the overall CPI growth indicates that the CPI has been affected substantially by rising prices for relatively few items.
Eesti Pank will publish a new inflation forecast on 26 June.
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