Estonia: Inflation moderates in the first month after euro adoption
February 7, 2011
In January, consumer prices remained flat over the previous month, which came in below both the 0.5% rise tallied in December and the 0.4% increase registered in January 2010. The monthly reading showed how prices for clothing and footwear, driven lower (-3.0% month-on-month) by seasonal sales, offset higher prices for food and non-alcoholic beverages (+0.4% mom) and transportation (+0.8% mom). As a result of January's flat reading, annual inflation decreased from 5.7% in December to 5.3%. Meanwhile, annual average HICP inflation (based on the harmonised index of consumer prices) jumped from 2.1% in November to 2.7% in December (the latest month for which data is available), which was in line with the latest forecast released by the Central Bank on 20 December. For this year, the Central Bank expects HICP inflation to average 3.5% before moderating to 1.8% in 2012.