Estonian inflation rises to 11.3%

  • 2008-03-10
  • By Mike Collier
TALLINN -- Inflation is still on the rise in Estonia, with no immediate prospect of a decrease according to the latest information from the Bank of Estonia.

Official figures reveal that the Estonian Consumer Price Index (CPI)basket became 0.4% more expensive in February, bringing year-on-yearprice growth to 11.3%. One grain of comfort is that the month-on-month price increase wasconsiderably slower in February compared to the 2.2% increase in pricesin January.

"Economic cooling, seen in the rapid decline inthe volume of retail trade and industrial production, contributes tothe easing of domestic price pressures. Compared to end-2007, wagegrowth has slowed, but the goverment should stimulate a further slowingwith the help of fiscal policies," said Eesti Pank economist Martin Lindpere.

However, the slowdown in the rate of increase may signal that inflation will start to decrease later this year, Lindpere believes.

"The next monthsÂ'' highinflation rate will be sustained by strong external price pressures,which are a temporary development and should subdue in the second halfof this year, contributing to a considerable slowdown in the inflationrate," he said.