Statistics Estonia uses a new methodology to calculate the consumer price index

“People’s consumption habits change, technology evolves, and more and more data become available. Statistics Estonia must keep up with these developments, and we must continuously update our methodologies,” explained Urmet Lee, the Director General of Statistics Estonia.

The methodological changes introduced in January concern food products and electricity. “Good cooperation with electricity providers and retail chains now allows us to calculate the consumer price index in Estonia more accurately than ever before. It means that a quarter of the data for the consumer basket are now obtained from sources that offer much higher quality,” said Lee. He added that the improvement of the CPI methodology will continue in the future.

Sales data from four retail chains are now used

According to Lauri Veski, the Consumer Price Statistics Service Manager at Statistics Estonia, one of the main updates concerns the collection of food price data. “We are now using sales data from four retail chains covering food, beverages and tobacco products,” he said.

Previously, Statistics Estonia’s price data collectors visited stores to record food price data. “Starting from 2026, we receive these data based on barcodes, showing the quantity of each product sold in the stores and the price paid by customers. In other words, before the change, our price data collectors recorded the shelf price of one specific brand of salt, while now we have access to the prices and quantities of all brands of salt sold. This allows us to monitor changes in consumer behaviour over time much more accurately. Additionally, we can use information about loyalty card discounts,” noted Veski.

The new electricity price index methodology incorporates new data sources and lessons learned from the energy crisis

The second major methodological update is related to electricity prices. “Previously, we relied on the electricity exchange price and the prices of fixed‑rate packages. With the new methodology, we use electricity sales data which reflect actual monthly electricity consumption and the prices paid. This ensures a more accurate picture of the trends in electricity prices. We now know how much people actually pay for electricity, regardless of package prices,” said Veski.

During the energy crisis (2021–2022), there were large price fluctuations on the market, and Statistics Estonia’s calculation model reacted too sensitively to these changes. The actual price of electricity consumed was lower than what the electricity price index indicated, which led to an overestimation of the consumer price index. Many customers used fixed‑rate packages, which lowered the real price increase compared with the exchange price. The overestimation of electricity price had a direct impact on the inflation rate. At the peak of inflation in 2022, the annual price increase was 19.4% “At that point, we overestimated inflation by 1.8 percentage points — the inflation would have been 17.6% when calculated based on the new data sources,” Lee explained. 

“Unfortunately, the revision of the methodology took much longer than we would have liked. In hindsight, we know we should have reacted more quickly,” said Lee. He added that, starting from this year, the new calculation method and better data sources will help to prevent any sharp price fluctuations from having excess impact on the electricity price index and the overall consumer price index.

The consumer price indices calculated using the old and the new methodology have been similar since December 2022 when the energy crisis was subsiding. “We have updated the CPI methodology, but we will not revise the consumer price index retroactively. While this would provide analytical clarity, it would also create a precedent that would make the consumer price index subject to continuous revisions, rendering it unstable over time and essentially unusable, because new and more accurate data for different components of the index will undoubtedly emerge in the future,” explained Lee.

“When making this decision, we followed the principles of CPI revision and international best practice. We also consulted experts from Eurostat, the International Monetary Fund, and the Organisation for Economic Co-operation and Development,” the Director General added.

The classification underlying the consumer price index has been updated

The consumer price index shows how much the prices of everyday goods and services have changed over time – in other words, how much more expensive or cheaper life has become. Statistics Estonia regularly monitors the prices of food, electricity, fuel, clothing, rent, transport and many other items. Based on this, we can see whether people have to pay more or less for the same thing than they used to. Price changes are tracked in specific product groups that have been defined in the Classification of Individual Consumption According to Purpose (COICOP), which has been updated as of 2026.

The main change is that there are now 13 main commodity groups instead of 12. The previous main group that covered miscellaneous goods and services has been split into two. Insurance and financial services now constitute a separate group, while personal care, social protection and miscellaneous goods and services are in the 13th main group.

For more information, see also the prices section on our website. 

When using Statistics Estonia’s data and graphs, please indicate the source.

For further information:

Susann Kivi
Media Relations Manager
Marketing and Dissemination Department
Statistics Estonia
Tel +372 5696 6484
press [at] stat.ee

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