Estonia: Headline inflation jumps to two-year high before adoption of Euro
December 9, 2010
In November, consumer prices increased 0.3% over the previous month, which came in below the 0.6% rise tallied in October. The monthly reading reflected a price spike in food and non-alcoholic beverages (+2.2% month-on-month), which was partially offset by lower prices for communication (-4.0% mom). As a result of November's price increase, annual inflation jumped from 4.7% in October to 5.3%, which is the highest level observed since December 2008. Meanwhile, harmonised annual average inflation, jumped to 1.5% in October from 1.0% in September, the last month for which data are available. The Central Bank attributed the inflation spike to rising taxes and higher global food prices and indicated that it expects upward pressures on food prices to ease going forward. Despite the severe debt woes of several Euro area member states, Estonia is poised to join the bloc as its 17th member in January 2011.