Estonia: Inflation accelerates in July
August 5, 2011
In July, consumer prices increased 0.5%, following the flat reading observed in June. The result mainly reflected an increase in prices in food and non-alcoholic beverages (+0.7% month-on-month) as well as housing categories (+0.7% mom), the two largest components of the CPI index. Consequently, annual headline inflation reaccelerated from 4.9% in June to 5.2% in July. Annual HICP inflation (based on the harmonized index of consumer prices) edged up from 4.9% in June to 5.3% in July. As a result, Estonia's harmonized inflation remains the highest among the 17 countries of the European Monetary Union. The trend continues to point upwards, with annual average HICP inflation inching up from 4.7% in June to 4.9% in July. For this year, the Central Bank expects HICP inflation to average 4.7%, before moderating to 2.5% in 2012.