Inflation remained high in 2018 in Estonia. Prices in Estonia rose at twice the average rate for the euro area, averaging 3.4% over the year. The main cause of inflation in Estonia and in the euro area as a whole was the rise in the price of crude oil, as the price of a barrel of oil on world markets rose from 69 dollars at the start of the year to over 80 dollars by October. Inflation in Estonia was driven higher by rises in excise that came in at the start of last year and by rapid wage rises.
On top of prices for motor fuels, other energy prices rose gradually last year, increasing for electricity, solid fuels and heat energy. Inflation pressures were eased though by food products, which saw falling inflation throughout the year.
Consumer prices were 0.3% lower in December than in November. This was because prices were down for motor fuels, and also because of seasonal discounts for manufactured goods. More discounts were offered for clothing and shoes than a year earlier. Services prices are rising, mainly because of higher prices for leisure services.
Inflation is likely to fall in 2019 if only because excise rates will rise by less. Eesti Pank forecasts that inflation will be below 3% this year assuming no very large changes in commodities prices. Futures prices for oil in the commodities market are currently at around 60 dollars a barrel, though the actual price may differ from this, as it has before.