Statistics Estonia: Consumer price index 0.2% lower in March
The Estonian consumer price index (CPI) was 0.2% lower in March than in the same month last year, influenced mostly by the transport sector, Statistics Estonia reported on Thursday.
Compared to February, consumer prices rose by 0.8%.
Compared to March 2015, goods were 0.3% and services 0.1% cheaper. Regulated prices of goods and services fell by 3.0%, non-regulated prices rose by 0.7% in annual comparison.
The annual change in the index was influenced the most by motor fuel, which got 11.6% cheaper, with gas prices dropping 10.7% and diesel fuel 13.5%. Heat energy, which was 11% cheaper, and alcoholic beverages, which were 6% more expensive, also had a bigger impact on the index. Year on year, liquid fuel got 26% more expensive, and pipeline gas became 26% cheaper.
Compared to February, the CPI was again influenced the most by transport, which accounted for more than a third of the overall rise. Motor fuel was 2.9% and plane tickets bought for March 21% more expensive. Food and non-alcoholic beverages, which cost 1.2% more, had nearly the same impact on the index, with 4.5% more expensive vegetables accounting for more than a third of the impact.
The last time the CPI was higher than 0.8% was in March 2012, when it stood at 1%.
The Estonian branch of Swedbank predicts that prices will take an upward turn in a few months' time, driven mainly by a rise in the prices of raw materials, the tobacco excise duty rise coming in June this year, and the elimination from the price index of the negative impact of the free higher education reform.
"According to our forecast, prices will start to rise a couple of months from now. We expect the oil barrel price to surpass the previous year's level from the fourth quarter onwards, this in both U.S. dollars and euros. The price of crude oil should hit 50 dollars a barrel by the end of the year," the bank's senior economist Liis Elmik said.
Elmik sees the low oil price as the main influence. Motor fuels were 12% cheaper than a year earlier despite an excise duty hike in February.
"Among different groups of goods and services, the prices of alcoholic beverages and tobacco, entertainment and leisure services, and clothing and footwear rose the most in March. The rise in excise duty rates lifted the prices of alcoholic beverages. The reason behind the higher cost of entertainment is the fast growth of consumers' purchasing power," Elmik said.
After nearly two years of falling prices, most consumers still didn't perceive a decrease in prices, Elmik added. According to a poll by the Institute of Economic Research, more consumers than before noticed that prices have come down, but 53% of respondents in March still thought prices had risen over the last 12 months. Only 1% of respondents expected prices to decrease over the next 12 months.