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.
2026-08-07Central Bank of Estonia
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.