In December, inflation was still rapid, but on a downward trend, in Estonia. Inflation decelerated to 17.6%, over the year, and declined by 0.1%, over the month. Price growth is slowing due to a decline in energy prices brought by a decline in economic activity and warm weather in Western Europe. The prices of gas and motor fuels decreased in December compared to the previous month, while the price of electricity rose somewhat. The stock price of electricity was lifted by colder weather in the Nordic and Baltic countries and the maintenance of several power plants.
Food prices continued to rise at the end of the year. The prices of many food products, including bread, meat, fish, and dairy products, have risen by 30 percent in a year. Prices of fruits and vegetables have increased less than other foodstuffs.
Swedbank expects price growth to decelerate in 2023. Falling household purchasing power and rising unemployment reduce demand for various goods and services. Consumers’ inflation expectations have also moved downwards in recent months. According to Swedbank, prices will rise by 9 percent in 2023. Food prices are expected to contribute the most. The average net salary is expected to grow just as much, by 9%, this year.
