Põhinflatsioon

Põhinflatsioon, Estonian for core inflation, is a measure of the inflation rate that aims to capture persistent, underlying price movements by excluding items with high short-term volatility, typically food and energy prices. By stripping out temporary shocks, it reflects the more persistent pressures influencing the general price level and is widely used by policymakers to gauge the stance of monetary policy and to form expectations about future inflation.

Calculation of põhinflatsioon can be done in several ways. The most common approach is to compute core inflation from the consumer price index (CPI) by removing food and energy components. In addition, statistical agencies and central banks may publish core inflation using alternative methods, such as trimmed-mean or weighted-median approaches, which reduce the influence of extreme price changes within the remaining basket.

Interpretation of põhinflatsioon centers on its role as an indicator of underlying inflation trends. If core inflation rises while headline inflation declines, it suggests persistent price pressures beyond temporary shocks. If core inflation moves in tandem with headline inflation, recent shocks may be affecting the broader inflation trend rather than being purely transitory. Central banks monitor core inflation because it is believed to be more stable and predictive of future inflation than headline measures.

Limitations include the fact that core inflation is not immune to all shocks and depends on methodological choices, such as which items are excluded and which statistical technique is used. It does not fully reflect households’ cost of living, which can be influenced by volatile food and energy prices. In Estonia, põhinflatsioon is published by Statistics Estonia and monitored by Eesti Pank as part of price development analysis.