"According to Swedbank's forecast, price increases in Estonia this year will reach 3%," Liis Elmik, Swedbank's chief economist, said in a press release on Friday, noting that of various goods groups, food, alcohol, tobacco and housing will contribute the most to the price increase.

"The state-financed regional bus transport that entered into force beginning in July will not have a significant impact on the cost of the consumer basket, as the share of the given service in the consumer basket is small — only 0.2%," she continued.

Price growth accelerated to 4% in June due to increases in the prices of energy and rent. "The price increase of energy had an impact on the price of both motor fuel and electricity," Elmik explained. "Repair work, which brought along a decrease in offering on the electricity market, also raised the latter's price."

According to the economist, the price of motor fuel rose by one sixth due to both higher excise duty rates as well as an increase in oil prices. "The price of crude oil remains high despite the agreement of OPEC and Russia to increase oil production," she noted. "The price of oil is supported by strong demand and supply problems in Iran and Venezuela. According to Swedbank, the price of oil this year will remain at over $70 per barrel and will then decrease slightly next year."

The price increase on food, meanwhile, was the same in June as it was in May at approximately 3%. "Of foods, dairy products and eggs have increased the most in price on year," Elmik said. "Higher excise duties raised the price of alcohol and tobacco products."

Estonia's June consumer price index (CPI) rose 4% on year and 0.9% compared to May, Statistics Estonia said on Friday. The last time the CPI had increased over 4% on year was in November 2017, when the increase totalled 4.2%.

Compared to June 2017, goods were 4.1% and services 3.9% more expensive. Regulated prices of goods and services rose by 11.2% and non-regulated prices by 2.1% on year.