According to Statistics Estonia, year-on-year consumer prices fell by 0.9% in July. Energy prices cheapened by 10%, whereas the price of food products (incl. alcohol and tobacco) went up by 1.7%. Core inflation, which encompasses manufactured goods and services, has been close to zero since April.  

Prices declined mainly due to a fall in energy prices as motor fuels cheapened by 14% year-on-year. Though the price of a barrel of crude oil exceeded 40 dollars in July on the global market, the impact of the rise on consumer prices has been mitigated by the strengthening of the euro exchange rate. Electricity prices for consumers have been fluctuating in recent months, because cheaper electricity from Norway and Sweden does not reach the Baltics because of limited transmission capacity.

The price of services has gone down, since travelling and leisure activities continue to be restricted due to the coronavirus. Consumers tend to either save their free money or spend it on manufactured goods and food. Due to the sharp economic downturn and growing unemployment, prices will continue to drop throughout the second half of the year.

For further information:

Viljar Rääsk
Tel: 6680 745, 5275 055
viljar.raask@eestipank.ee

Media enquiries: press@eestipank.ee