OREANDA-NEWS. November 11, 2011. According to Statistics Estonia, the cost of living decreased by 0.1% in October and increased 4.4%, year-on-year. Preliminary estimates show that euro-area inflation remained unchanged on September at 3%, reported the press-centre of Eesti Pank.    

Inflation slowed mostly due to the slower cost of food. Owing to favourable weather conditions, the price of vegetables fell more than usual. For example, the price of potatoes declined 16% in September compared to August. The cheapening of many food groups in the global market also passed through to Estonia's consumer prices. The slowdown in annual price growth was partly caused by a higher comparison basis, since the prices of several food groups hiked in the autumn of 2010.

Core inflation continued accelerating in October, making up 1.7%. This was primarily due to the increasing cost of services. According to the Tax Board, the speed of wage payments picked up in September. Besides wages, core inflation is also quickening due to the rise in rental prices after a slump of several years. By October, the cheapening of communication services was 10.3%, year-on-year.

The fourth-quarter inflation will be kept up by the growing cost of energy, especially thermal energy. The main risk factor is the volatility of oil prices.