Global| Oct 06 2006Eastern Europe CPI Uneven, but Coming Under Control; Energy Plays a Part
Summary
Three Central and Eastern European nations reported September CPI data today. There are hints throughout of easing inflation pressures, although these performances remain uneven. In Estonia, the CPI, seasonally adjusted by Haver [...]
Three Central and Eastern European nations reported September CPI data today. There are hints throughout of easing inflation pressures, although these performances remain uneven.
In Estonia, the CPI, seasonally adjusted by Haver Analytics, actually fell in the month, by 0.3%. This followed at 1.1% increase in August and helped pull the year-on-year rate from 5.0% in August to 3.8% for September. Transportation and recreation were the main contributors to the softening. 
Slovenia's CPI rose 0.3%, but this was notably less than August's 1.5% advance. The weaker September result pulled the year/year pace down to 2.5%, after stronger figures in four of the previous five months. Here too, transportation contributed to the slowing.
In the Ukraine, inflation remains strong and accelerated through last year, when it was up 13.5% on average over 2004's level. In September, the CPI was up 2.2%, hardly a slower pace at 29.2% annualized, but the year-on-year rates have come down considerably from last year's amounts. The Ukraine experiences wide swings in individual CPI categories, so identifying major forces on the total is an indeterminate process. This country, however, is the one among these three that did not see fuel prices ease in September. They were still going up. 
In Estonia and Slovenia, transportation costs declined outright; this included falling motor fuel prices in Slovenia and we assume also in Estonia. In Slovenia, which reports more detail (in the form of the EU's HICP array), airfares also fell. As oil prices begin to drop, we note that such declines benefit every energy-consuming country. We see already how this helps in these two small nations, which are among the earliest to publish their September CPI data. A week ago, Eurostat published its "flash" estimate for the entire EuroZone, and at 1.8% year-on-year, it indicated a notable slowing from prior months, which have been well over 2%.
| Consumer Price Indexes | Sept 2006 | Aug 2006 | 2005* | 2004* | 2003* |
|---|---|---|---|---|---|
| Estonia, SA, 1997=100 | 146.2 | 146.6 | 138.4 | 133.0 | 129.0 |
| Mo/Mo | -0.3 | 1.1 | |||
| Yr/Yr* | 3.8 | 5.0 | 4.1 | 3.0 | 1.3 |
| Slovenia, SA, 2005=100 | 103.8 | 103.5 | 100.0 | 97.6 | 94.2 |
| Mo/Mo | 0.3 | 1.5 | |||
| Yr/Yr* | 2.5 | 3.3 | 2.5 | 3.6 | 5.6 |
| Ukraine, SA, 2005= 100 | 112.4 | 110.0 | 100.0 | 88.1 | 80.8 |
| Mo/Mo | 2.2 | 1.3 | |||
| Yr/Yr* | 9.1 | 7.4 | 13.5 | 9.0 | 5.2 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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