The assertion by the Estonian Institute of Economic Research (EKI) that Estonia is moving towards becoming one of the five most expensive countries in Europe is inaccurate, according to the prime minister’s economic adviser Ardo Hansson.
“Based on the latest Eurostat data, Estonia’s price level last year was 2.1 percent below the EU average. With Switzerland, Iceland, and Norway included, Estonia was 15th in Europe. Within the EU alone, we were in 12th place,” Hansson said.
“For Estonia to reach the fifth position in Europe, our price level would need to grow 37 percent faster than in Luxembourg and 21 percent faster than in the Netherlands,” Hansson said.
With Estonia’s current inflation rate at 2.5 percent, which is roughly the same as the EU average, Hansson does not foresee this happening, even with the introduction of security taxes.
Compared to the EU average price level, Switzerland stands at 174.1 percent, Iceland at 156, Denmark at 143.4, Ireland at 141.8, Luxembourg at 134.5, Norway at 125, Finland at 124.5, the Netherlands at 118, Belgium at 115.5, Sweden at 113.6, Austria at 111.6, France at 110.1, Germany at 109.6, Italy at 99, and Estonia at 97.9, he said.
Peeter Raudsepp, director of the Estonian Institute of Economic Research (EKI), stated on Tuesday that overall business confidence remains low, though it varies by sector. For example, the service sector views things more positively.
“Confidence is improved by entrepreneurs seeing that it is possible to raise prices,” Raudsepp said.
The cost of the food basket has risen in recent years, with an average price increase of 0.2 percent over the past year. Raudsepp noted that Estonia is already an expensive country to live in, with wages and prices making it more expensive than Sweden and only slightly cheaper than Finland. “We are moving towards being one of the five most expensive countries in Europe,” he said.
“Compared to the EU average, our food prices are at 109 percent, Finland at 110, and Sweden at 105 percent. We are practically on par with Finland and are among the top 10 most expensive countries in Europe,” Raudsepp said. The situation is even bleaker in terms of clothing and footwear prices, where Estonia ranks in the top three in Europe.
Source: BNS
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