Estonian Consumer Price Decline Eased a 2nd Month in December

The decline in Estonia’s consumer prices slowed in December for a second consecutive month as fuel prices increased.

Consumer prices slid 1.7 percent from a year earlier, following a 2.1 percent decline in November, the Tallinn-based statistics office said on its Web site today. In the month, prices rose 0.1 percent, the first increase in four months.

The $23 billion economy has bottomed out after export demand rose and demand stabilized, the Finance Ministry and central bank have said. The smallest of the three Baltic states is set to become the euro region’s next member and targets adopting the single currency by 2011.

Estonia’s government raised taxes on alcohol, fuel and electricity from Jan. 1 to boost budget revenue and to stay on track with its euro adoption goal. Tax increases won’t spark a price rally because domestic demand is likely to remain weak, the central bank said last month.

Euro applicants need to keep inflation within 1.5 percentage points of the 12-month average inflation rate of the three EU nations with the slowest annual price growth, according to targets set out in the so-called Maastricht Treaty.