Deflation To Remain A Major Problem

Estonian deflation continued largely unabated through the end of 2009 as expected, with the consumer price index falling by 1.9% y-o-y in December. Few shifts were recorded in any of the major components of the consumer price basket, with food prices contracting by 6.4% y-o-y in the month, roughly on par with the pace of decline seen in the previous three months. Housing and utilities prices too, continued to show significant deflation, falling by 7.1% y-o-y in December, down from -7.0% in the previous month.

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