OREANDA-NEWS. December 11, 2012. Data from Statistics Estonia show that the Estonian consumer price index was 0.3% lower in November than in October and prices were 3.6% higher on an annualised basis. Eurostat’s flash estimate shows that inflation in the euro area slowed from 2.5% in October to 2.2% in November, reported the press-centre of Eesti Pank.

The prices of motor fuels and thermal energy fell in November. The price of motor fuels decreased because the oil price has retreated from its high levels of recent months and the euro exchange rate has strengthened since July. The same factors have also affected the price of imported natural gas. However, electricity prices are set to rise from the start of the new year and this has led to sharply higher inflation expectations and greater uncertainty about economic circumstances for households.

Food prices rose by a sharp 5.8% in reaction to the rise in global food commodity prices that started in the summer. The increase in food commodity prices has not yet been fully passed through to Estonian consumer prices, which means that food prices are likely to continue growing rapidly. The rise in global food commodity prices has, however, slowed down now.

Core inflation remained low in November at only 1.3% as the rise in accommodation services and rent slowed in the second half year and communications prices continued to fall. Communications are 11% cheaper than at the start of 2011.

Eesti Pank will publish a new economic forecast, including an inflation forecast, on 12 December.