Estonia’s annual inflation fell to 9.2% in June 2023, down from 11.2% in May, according to the Bank of Estonia. Despite wage growth exceeding 10% early in the year, full purchasing power recovery isn’t expected until 2025. The decline in inflation is mainly due to falling energy and commodity prices. Future price pressures are predicted to lessen due to cheaper commodities and lower energy costs, though a VAT increase could slow recovery. Corporate profits have also significantly increased due to consumer spending.