Estonia Inflation August 2016


Estonia: Inflation in August rose for first time in over two years

September 7, 2016

In August, growth in consumer prices inched up from a flat reading in July to 0.1%. According to Statistics Estonia (SE), the monthly reading mainly reflected higher prices in 7 of the 12 categories of the index, among which clothing and footwear was the category that increased the most.

Inflation rose 0.3% in August, which contrasted the 0.1% drop observed in July. August’s reading marked the first increase in annual consumer prices since June 2015 and the highest reading since February 2014. The annual increase was driven by the implementation of new excise taxes on alcoholic beverages and tobacco and the fading out of the low base effects of energy prices. Meanwhile, the annual average of consumer prices remained unchanged in August at the 0.5% drop observed in July.

HICP inflation was 1.1% in August, coming in above the 0.8% reading observed in July. Meanwhile, average HICP inflation inched up from 0.2% in July to 0.3% in August.

The Central Bank forecasts harmonized inflation averaging 0.6% in 2016 and 2.9% in 2017. FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 0.5% in 2016, which is unchanged from last month’s forecast. In 2017, the panel expects average inflation to accelerate to 1.9%.

Author: Jean-Philippe Pourcelot, Economist

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Estonia Inflation Chart

Estonia Inflation August 2016 0

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Statistics Estonia

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