Consumer Prices Jump 1% in March
Making their biggest one-month gain since 2008, consumer prices climbed a full percentage point between February and March and registered a 4.4 percent rise year on year, fresh figures from Statistics Estonia show.
The largest drivers of the short-term rise were higher costs of transport, food and non-alcoholic beverages, and alcoholic beverages and tobacco, each accounting for about a quarter of the increase, the statistics agency said.
Motor fuel was 2.9 percent more expensive than it had been in February and plane tickets saw a 28 percent price rise for the month, both reflections of higher oil prices on the world market. Meanwhile, new excise duty rates triggered a 7.6 percent increase in the price of tobacco products.
The 4.4 percent year-on-year CPI increase, however, was much more influenced by pricier household expenditures, particularly heat energy, electricity and gas.
According to leading Swedbank macroeconomic analyst Annika Paabut, when looking at the 17.7 percent rise in heat energy prices and 13.7 percent rise in electricity prices over the year, the relatively low comparison base from the first half of 2011 has to be taken into account.
"In the second half of the year, the base reference was somewhat higher and therefore the annual price growth should slow down. We also expect more moderate growth in food prices - the prices of meat, milk and some cereals on the world market have shown a downward trend since the beginning of the year so there is reason to believe that that drop could later affect Estonian consumer prices," she said.
Paabut said that Swedbank's prediction in January of a 3.2 percent price increase for 2012 may prove overly optimistic, but noted that lower demand, dampened by the current high prices, should keep prices from growing too rapidly from here on out.
Steve Roman