Estonian Inflation Falls to Lowest in 29 Months on Transport

Estonian inflation unexpectedly slowed to the weakest pace in 29 months in January as free public transport in the capital outweighed increases in electricity, alcohol and tobacco prices.

Inflation was 3.4 percent from a year earlier, compared with 3.5 percent in December, the lowest level since August 2010, the statistics office in Tallinn said today on its website. That’s less than the 3.8 percent median forecast from a Bloomberg survey of four analysts. Prices rose 0.7 percent from the previous month.

Inflation in the newest euro member will slow to 3.6 percent this year from 3.9 percent in 2012 as global food and fuel prices decline, the central bank predicted last month. Prices will get a temporary boost this year as households are charged market rates for power and state-owned AS Eesti Energia is forced to pay for carbon-emissions quotas, it said.

The Tallinn municipality, home to almost a third of the nation’s 1.3 million population, made public transport free for all residents of the capital starting this year.

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