Estonia, which is on course to join the eurozone next year, saw its annual inflation rate jump to 3.5 per cent year-on-year - slightly higher than expected, according to official figures released today, dpa reported. The consumer price index increased 3.5 per cent in June 2010 compared to June of the previous year and 0.4 per cent compared to May this year, said Statistics Estonia. The jump was mainly caused by a 12 per cent price increase affecting electricity and the end of special promotional campaigns targeted at mobile phone users, Finance Ministry spokesperson Livia Vosman said in a statement. Baltic analyst at Danske Bank, Violeta Klyviene, said the rise in consumer prices could complicate Estonia's recovery trend following a 15 per cent contraction in group domestic product (GDP) during 2009. "There is a growing risk that Estonia might not fulfil the Maastricht criterion on inflation," Klyviene said. "While it is clear that the European Commission will not change its opinion regarding Estonian euro adoption in 2011, the current inflation trend confirms the European Central Bank's concerns that Estonia might not fulfil the necessary criteria." Estonia's debt and deficit levels have consistently been lower than those of current eurozone states over the last five years. However, its inflation soared after it joined the EU in 2004, reaching a peak of 11.4 per cent in June 2007, ruling it out for swift euro adoption. -- SPA
