Estonian Annual CPI Continues To Fall In August

Prices in Estonia continued to fall on an annual basis in August as economic hardships weighed on price developments, data showed Monday.

The Baltic state's consumer price index was 0.9% lower in August than the same month of 2008, with transport prices falling 6.2% and food and non-alcoholic beverages prices dropping 5.7%, Statistics Estonia said.

Milk and dairy products were almost 16% cheaper compared with the same time a year ago, while fresh fruits and vegetables cost 16% and 29% less, respectively, than a year ago, the agency said.

August is the fourth month in a row the index has seen a decrease in on-year prices, and continues the remarkable turn in price development as Estonia's economy struggles.

The yearly inflation rate was in double digits just last summer, but economic hardships from tighter credit, falling property prices and global financial upheaval have led to sharp price falls.

The data help Estonia's euro adoption chances. High inflation has prohibited qualification in recent years but the country now hopes to apply for membership to the single-currency zone.

On a monthly basis, the index was flat in August, from rising 0.9% in July and remaining unchanged in June, as price increases in motor fuel and the end of sales in clothing and footwear offset seasonal price decreases of fresh fruit and vegetables, Statistics Estonia said.