More people are expecting the rate of inflation to continue rising, according to a recent survey, as economies emerge from the coronavirus crisis.
The consumer survey, compiled by the Institute of Economic Research (Eesti Konjunktuuriinstituut), found that the consumer barometer the organization routinely compiles showed the number of people expecting prices to rise in the near future had grown.
Inflation has been experienced in other countries, including the U.S., while in Estonia, the Consumer Price Index (CPI) went into the black again, having seen a period of deflation resulting from the early stages of the pandemic.
In April 2020, CPI stood at -0.8% YoY, principally the result of the arrival of the coronavirus. One year later, CPI was +1.9%.
Early 2020 also saw world oil prices go into negatives.
Rasmus Kattai, an economist at Eesti Pank, Estonia’s central bank, says more rapid price growth is likely to appear in Estonia throughout the year, as the crisis comes to an end and economic activity grows.
Kattai put his CPI forecast for 2021 at over 2%, driven in particular by rising food prices, though wage growth was likely to outstrip CPI, he said.
Marje Josing, institute of economic research director, concurs, with rising commodity prices worldwide and supply chain issues finding their way into food and other consumer price rises.
While central banks are often pursuing looser monetary policy, she says, the European Central Bank is unlikely to install any drastic changes. (ERR/Business World Magazine)
