Ministry forecasts Estonia's inflation to fall in 2026
Estonia's Ministry of Finance, in its June inflation review, indicated that easing Middle East conflict could bring inflation below the spring forecast of 4%, with further decline expected in 2026.
Inflation Data and Forecasts
According to Statistics Estonia, prices fell 0.5% in June compared to the previous month, while annual inflation slowed from 3.7% in May to 2.3% in June. Across the eurozone, annual inflation slowed to an estimated 2.8%.
Kristjan Pungas, an analyst in the Ministry of Finance's fiscal policy department, said Estonia's inflation rate was among the lowest in the eurozone in June, and food prices declined both month-over-month and year-over-year.
"As the conflict in the Middle East eases, the Ministry of Finance expects this year's inflation to come in below the 4 percent forecast in its spring economic outlook," Pungas said.
The Ministry of Finance's spring forecast projected inflation of 4% this year, while the Bank of Estonia's spring forecast put it at 3.8%. The ministry's forecast issued last summer projected this year's inflation at 3.5%.
The Ministry of Finance will present its summer economic forecast on August 27. The forecast will serve as the basis for drafting next year's state budget. Inflation in Estonia was 4.8% last year.
