Estonia: Slowing inflation boosting purchasing power: central bank

Slowing inflation and strong wage growth in Estonia have increased people’s purchasing power, according to the Bank of Estonia, BNS reports. In June 2024, the consumer price index rose by only 2.5% on year, which was the slowest rate in three years, primarily due to falling energy prices. At the same time, most services have become more expensive, driven by rising wage costs. Wage growth remains robust at around 7-8%, far outpacing the inflation rate. The central bank forecasts an average annual price increase of 4%, with potential seasonal inflation upticks in the second half of 2024, influenced by tax increases aimed at addressing budget deficits.