Estonia: CPI inflation slows down to 2.1% y/y in July

CPI inflation slowed down to 2.1% y/y in July, from 2.4% y/y in June, according to figures of the statistical office, published on Wednesday. The deceleration was driven by the housing sector, where price growth slowed down tangibly to 2.1% y/y, partially attributed to a base effect. Moreover, prices of alcohol and tobacco dropped by 1.9% y/y, while transport prices declined by 0.8% y/y with petrol and diesel prices down by 1.7% y/y and 0.2% y/y, respectively.

On the other hand, the most significant upward pressure on the headline index was exerted by food, where price growth strengthened to 4.4% y/y, mostly due to expensive vegetables. Looking ahead, consumer price growth might ease down somewhat further in the coming months given the high reference base. To remind, the government expects average annual inflation at 2.1% in 2019, while the average in the period January-July came in at 2.5% y/y.

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