Measures to compensate for high energy prices and the introduction of universal service allowed consumer prices to fall by 1.1 percent in October in a monthly comparison, compared to a year earlier, the price increase slowed down to 22.5 percent, Kristjan Pungas, analyst at the Fiscal Policy Department of the Ministry of Finance said.
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In the euro area, inflation continued to accelerate, reaching 10.7 percent according to the preliminary estimate.
Since the electricity and gas exchange prices have decreased from the high levels reached in the summer months, the impact of the energy mitigation measures was somewhat more modest in October.
The price drop has been favored by the faster-than-expected filling of European gas storage facilities, measures to reduce consumption and warmer than usual weather.
As for the other components of the consumer basket, a relatively broad-based price increase could be observed, similar to previous months. The increase in food prices accelerated to 28 percent in October. Food manufacturers have had a significant increase in the cost of inputs and have not been able to fully incorporate it into the final prices.
This means that the pressure for further increases in food prices will remain.
Largely due to cost pressures, the price increase of services accelerated to 13 percent. Since energy is an important cost component, the prices of water supply rose by almost 20 percent.
In addition, in recent months, the price of various services related to leisure and sports can be observed.
Since the energy mitigation measures are established for six months, they limit the effects of the energy crisis on domestic consumers and help to somewhat reduce high inflation.
Although the increase in the price of inputs will probably manifest itself in the price of various goods and services in the coming months, the strengthening reference base from a year ago will slow down inflation. As a result, inflation should slow down to below 20 percent at the end of the year. ■