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Energy prices mainly fell because the oil price fell on global markets, but the overall price level was also affected notably by the cut of 25% in excise on strong alcohol and beer in July. Cheaper alcohol has slowed inflation by around 0.2 percentage point this year.

The consumer basket without food and energy rose in price by 2.5% over the year. Rising prices in Estonia continued to be driven by higher prices for services, as the economy has been generally doing well, with unemployment low and wages rising fast.

With global economic growth slowing, moderate price growth should prevail in Estonia and in the euro area in the near term. International trade barriers have reduced demand for goods and commodities. The Eesti Pank June forecast expects consumer price inflation will be 2.5% this year.