OREANDA-NEWS. February 10, 2011. According to Statistics Estonia's consumer price index, the price level remained unchanged in January. Prices have risen 5.3%, year-on-year. Although it is not easy to tell the difference between the direct impact of the euro on the prices of goods and services and other price changes, it can be said the changeover from the kroon to the euro did not cause any serious price distortions. Both the Consumer Protection Board's (CBA) price observations and Statistics Estonia's consumer price index data confirm that. Price trends did not change much in the first month of the year, reported the press-centre of Eesti Pank.

Eurostat's preliminary estimates show that price growth in the euro area picked up to 2.4% (y-o-y) in January. This means that month-on-month price decrease is 0.6%. In many euro-area countries, start-of-the-year discounts are larger than in Estonia.

The CBA's price observations show that January price change patterns in Estonia were not different from those of previous months. In 60% of the cases, goods prices did not change compared to December. Prices were raised in 19% of the cases and lowered in 21% of the cases. There were no noteworthy deviations in the two price observation groups.

The transition to psychologically convenient prices may continue in some sectors. According to the CBA's price data on the most popular goods and services, the share of such prices that end in zero or nine euro cents has somewhat increased since summer. When speaking about EEK-prices, those ending in 50 sents and 90 sents were the most popular last year. Nearly four-fifths of all the goods and services had such prices. The further adjustment speed and direction of prices in euro will depend on competitiveness.

Statistics Estonia's consumer basket components do not refer to significant deviations, either. Unusual price rise of goods and services is in this case one that exceeds the standard deviation of price change by three times. Thus, coffee, canned fish and construction materials stood out in January. Publications and TV-sets have, on the other hand, undergone a larger-than-usual price decline. However, it cannot be said that the fact the price changes took place in January is related to the euro. For example, the price rise of coffee (11.6%) is more the result of global market developments.

Countries that have adopted the euro before us experienced higher price rises in eating out, hairdressing, leisure and sports services in the first months of the first euro-year. Compared to a month earlier, in January, the price of leisure and sports activities went up by 2.9%, eating out became 1.8% more expensive, household services appreciated by 2.4% and clocksmith services grew by 2.1% in price, which is notably more than in January in earlier years.

Eesti Pank forecasts the HICP to grow by 3.5% in 2011. Annual inflation is expected to decline in March due to changes in the reference base.