The Central Bank of Estonia reported that annual inflation remained low for a second consecutive month at 2.2% in July, compared with close to 3% across the euro area. Estonia recorded the euro area's lowest inflation rate, while the central bank maintained its forecast of 3.4% inflation for the full year. Lower food prices were the main driver, with the consumer food basket 1.6% cheaper than a year earlier and particularly large declines in fruit, vegetables, butter and dairy products. Electricity prices fell 4% from June, while prolonged declines in clothing and insurance prices also contained inflation. The central bank cautioned that weather-related harvest damage, higher input costs, low Nordic water levels and power station maintenance could increase food and electricity prices later in the year or early next year.
Central Bank of Estonia2026-08-07
Central Bank of Estonia reports 2.2% July inflation, lowest in the euro area
The Central Bank of Estonia reported annual inflation of 2.2% in July, the lowest rate in the euro area, and maintained its 3.4% full-year forecast. Falling food, electricity, clothing and insurance prices contained inflation, although weather, input costs and energy supply conditions could push prices higher later in the year.