Consumer prices declined further

A decline in CPI in September in Estonia was expected. Consumer prices decreased by 0.6% compared with last year’s September and 0.2% compared with August.

Annual consumer prices were influenced the most by cheaper electricity, heating and motor fuels. Warm weather, better connectivity with cheaper electricity in the Nordic countries and lower prices of electricity network fees led to cheaper electricity and heating. The weighted average exchange price of electricity was 11% lower in September compared with the same month one year ago.

The prices of transport services decreased because of cheaper motor fuels. The price of oil in the global market has declined due to higher stocks caused by increased production of oil mostly in North America and Libya.

The prices of mobile communication services continued to shrink, year-on-year. Education fees were smaller as free higher education opportunities widened.

Deflation is expected to continue in October, mainly due to lower prices of energy. Oil prices decreased to around 90 USD per barrel globally at the beginning of October. At the same time, euro is expected to weaken further against the USD in the coming months, raising the prices of imports. Around 13% of imports of goods are paid in USD in Estonia.

Source: Swedbank

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