Estonia Inflation October 2016


Estonia: Inflation moderates in October

November 14, 2016

Consumer prices dropped 0.3% in October, contrasting the 0.2% increase observed in September. According to Statistics Estonia (SE), the monthly reading mainly reflected lower prices in 6 of the 12 categories of the index, among which food and non-alcoholic beverages and miscellaneous goods and services were the categories that dropped the most.

In October, inflation moderated from September’s over two-year high of 1.0% to 0.6%. October’s reading marked the third increase in annual consumer prices since June 2015. 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 variation in consumer prices softened from the 0.3% drop observed in September to a 0.2% decline in October.

HICP inflation was 1.0% in October, coming in below the 1.7% reading observed in September. Meanwhile, average HICP inflation inched up from 0.4% in September to 0.5% in October.

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 0.4% in 2016, which is unchanged from last month’s forecast. In 2017, the panel expects average inflation to accelerate to 2.0%, which is also unchanged from last month’s forecast.

Author: Jean-Philippe Pourcelot, Economist

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Estonia Inflation Chart

Estonia Inflation October 2016 0

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

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