Flash comment: Estonia - March 7, 2012

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Flash comment: Estonia - March 7, 2012: Inflation in February driven by housing costs

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Flash comment: Estonia - March 7, 2012

  1. 1. Flash comment: Estonia Economic commentary by Economic Research Department March 7, 2012 Inflation in February driven by housing costs Contributions to annual CPI growth, pp According to Statistics Estonia, consumer prices grew by 0.4% in 12 other February compared to January. The annual growth, at the same transport time, slowed to 4.2%. 10 housing food 8 CPI As expected, the biggest impact to annual price increase came 6 from housing costs which grew by 10.6% and contributed 40% to 4 the overall inflation. This was caused by growing energy product prices, for example electricity was 13.7% and heat energy 16.7% 2 more expensive than a year ago. However, in monthly comparison 0 the change in housing costs was flat. 2008 2009 2010 2011 2012 -2 Another important contributor to inflation was alcohol and tobacco -4 prices which were up by 2.2% in monthly and 6.3% in annual comparison. This was affected by end of sales campaigns as well Annual CPI growth as alcohol excise rate hike. In addition, growing fuel prices pushed 30% up transport costs by 0.6% mom and 4.9% yoy. Food price growth, at the same time, has been slowing for months and 25% reached 2.9% yoy in February (down from 13.2% registered in 20% February a year ago); as a result, its contribution to overall inflation has fallen from 55% a year ago to 16%. 15% 10% We expect price growth to continue to slow in coming months. Our 5% current forecast sees consumer price growth slowing to 3.2% on average this year. 0% 2007 2008 2009 2010 2011 2012 -5% regulated prices non-regulated prices Annika Paabut Inflation expectations, points Chief Economist 80 + 372 6 135 440 60 annika.paabut@swedbank.ee 40 20 0 2008 2009 2010 2011 2012 -20 -40 manufacturing construction -60 retail services -80 consumersSwedbank Economic Research Department Flash comment is published as a service to our customers. We believe that we have used reliable sources and methods in the preparation of the analyses reported in this publication.SE-105 34 Stockholm, Sweden However, we cannot guarantee the accuracy or completeness of the report and cannot beek.sekr@swedbank.com held responsible for any error or omission in the underlying material or its use. Readers arewww.swedbank.com encouraged to base any (investment) decisions on other material as well. Neither Swedbank nor its employees may be held responsible for losses or damages, direct orLegally responsible publisher indirect, owing to any errors or omissions in Flash comment.Cecilia Hermansson, +46 8 5859 7720

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