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Tuesday 19.12.2017 | Name days: Sarmis, Lelde

Ansip: Estonia lacks ways to stop inflation

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Estonian Prime Minister Andrus Ansip

Estonia only has few instruments to control the price growth, considers the Estonian Prime Minister Andrus Ansip, noting that the introduction of the euro is not the rapid price increase reason.

«The constant rise in dairy products price is also a topical issue in Latvia, which is not going to introduce the euro until 2014,» told Ansip.

The growth of inflation in Estonia is likely to continue, as the price of fuel and food products is still climbing. It raises concerns on whether the entry into the euro zone will stabilise the price growth, considers the Estonian Prime Minister.

«There are only few instruments in the governments’ hands to limit the inflation,» Ansip emphasized. «The budget is practically the only one. Small and open economies, such as ours, are not able to avoid the pain caused by the external price pressure.»

Last week the Estonian government agreed on the freezing of the state employee salaries until the year 2011. However, it still awaits the Parliament’s approval. In order to affect the inflation, the Cabinet of Ministers intends to introduce higher tobacco tax for the following two years starting from the next January. Otherwise, the wage freeze will have to be continued after 2011; yet, it is still too early to judge, Ansip notes.

The Estonian Ministry of Finance expects that the average inflation indicators this year will reach 2.6%, while the price growth – 4%, reports bbn.ee.

The Estonian consumers forecast that the inflation will continue to grow, suggests the Estonian Economic Research Institute data. This result was «definitely» affected by the chances of the euro introduction.

Moreover, 35% of the consumers expect the inflation to increase during the following twelve months. In August, 32% were of the same opinion, but a year ago – only 5%.


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