TALLINN - The Finance Ministry and the Bank of Estonia have said that annual inflation would remain higher than 4 percent for the near- to mid-term.
"A new cycle in the rise of oil prices started on the world market at the beginning of July, and it will also be reflected in our consumer price index. The prices of vegetables continued to grow, too, as did expenses connected with housing," said Andres Saarniit, adviser of the Bank of Estonia.
Saarniit added that, as no fall in oil prices was anywhere in sight, and the dry summer was unfavorable to farmers, there was little likelihood that the pace of inflation would fall below 4 percent in the near future.
Commenting the consumer price index for July, Estonia's Finance Ministry said that price pressures accompanying strong domestic demand and higher energy prices have not made a slowdown in inflation possible.
An average rise in the consumer prices by more than 4 percent could be expected also in the second half of the year, analysts said, and a slowdown can only be expected at the beginning of next year.