No fall in Estonian inflation

  • 2008-07-08
  • By Mike Collier

Accordingto Statistics Estonia, the percentage change of the consumer priceindex in June 2008 compared to June 2007 was 11.4%.

In June 2008 compared to June of theprevious year, the prices of goods changed by 10.9%, of which theprices of food by 15.8% and the prices of manufactured goods by7.0%. The prices of services increased 12.5%. Regulated prices ofgoods and services changed by 22.0% and non-regulated prices by8.5%.

As in the previous months, the indexwas mainly influenced by the price increase of food, the increase inthe expenditures on housing, as well as by the increase in theprices of motor fuel. Dairy, cereal and meat products gave fourfifths of the price increase of food.

The increase in the expenditures onhousing was mostly influenced by the increase in the prices of heatenergy. Three quarters of the 14.7% price increase of the transportindex was caused by the direct price increase of motor fuel.

On average, the prices of goods andservices in June were 0.6% higher than in May.

Commenting on the figures, Danske Bankanalyst Violeta Klyviene said: "We expected a marginal decelerationin consumer price growth, but due to ongoing rising oil prices, CPIremained at the same high level of 11.4% year-on-year (0.6%month-on-month) as it was in May.

Worse, Klyviene doesn't expectinflation to begin falling any time soon. "We are not expecting adeceleration in consumer price rises in July, as new excise duties onalcohol and tobacco will take effect from 1st July. In addition, theelectricity tariffs of Eesti Energia will go up 5-11%. Despite asharp deceleration in domestic demand, the hike in so-calledadministrative prices and upward trend in oil prices is keepingEstonian CPI at a high level," she said.