Euros. Source: (Marco Verch/Wikimedia Commons)

According to Kristjan Pungas, fiscal policy analyst at the Ministry of Finance, the ministry expects inflation to decelerate over the coming few months. The reasoning behind the forecast is that last year’s excise hike is now noticeable in the reference base, and that a combination of different factors has seen energy prices rise beyond the expected levels.

“June’s 4% inflation exceeds the Finance Ministry’s spring forecast mostly due to the higher than expected prices of energy, or fuel and electricity. June’s inflation will remain the year’s highest, and inflation can be expected to decelerate over the next few months mainly because of a decrease in the contribution of tax measures, as the increase in the excise duty rate on low-alcohol beverages from a year ago will be reduced in July-August,” Pungas said in a press release.

Due to higher energy prices, price growth in Estonia as well as in the euro area turned out to be the highest this year. “In addition to high oil prices, the growth in the price of energy was amplified here by a noticeable increase in the price of electricity. While the exchange price of electricity usually remains low…