Although prices have increased in the fastest rate of the last 12 years, the inflation is set to slow down next year, the Bank of Estonia assesses.
“Our estimates show that price increases will remain between 3% and 4% next year,” the central bank’s economic research department head Martti Randveer said.
Data from Statistics Estonia showed that the consumer price index rose by 1.2% from August to September and by 6.6% YoY. This is the highest rate since December 2008, when the consumer price index stood at 7% YoY.
Since June, Estonia has been the region with the highest inflation rate in the eurozone. While the average price increase in the eurozone in August was 3%, it was 5% in Estonia.
Randveer explained that when compared to the eurozone, price increases in Estonia were the most affected by fuel and energy prices, the consumption of which was higher in Estonia than in the eurozone on average. Energy prices have gone up significantly recently.
Another of Estonia’s peculiarities is that when compared to other countries in the eurozone, changes in global prices carry over to Estonian prices much faster, Randveer added.
“For example, as global market prices have increased, so have prices in Estonia. But the situation was reversed last year: there was a small price increase in the eurozone, but prices in Estonia decreased some. The reason for this is that fuel prices were falling on the global market and this carried over to us faster than to the eurozone,” the economist explained. (ERR/Business World Magazine)