Expert Explains Price Increases ({{commentsTotal}})

Business
Business

LHV macroanalyst Heido Vitsur has highlighted four main reasons for the nation's fast paced price rises in recent years: government policy, economic growth, the situation of the internal market and the proximity to Finland.

Speaking on ERR radio Wednesday, Vitsur said that the government's decision to increase VAT and various excise duties has played its part.

He said the lack of internal competition that would stabilize prices, and the dominance of an ideology of justifying price increases derive from our size and characteristics of Estonia's market.

While the above conditions are somewhat flexible, Finland's effect, as one of Europe's most expensive nations with very high purchasing power, is out of Estonia's hands, Vitsur said.

Future looking more stable

The analyst said he sees no reason why the high increases should continue next year, predicting inflation levels closer to Europe's average.

Speaking about indicators that will influence prices levels in the future, Vitsur said that much will depend on whether the government continues a path towards more independence from EU structural funds by raising taxes, and also on the nation's economic growth.



{{c.alias}}
{{c.createdMoment}}
{{c.body}}
{{cc.alias}}
{{cc.createdMoment}}
+{{cc.replyToName}} {{cc.body}}
No comments yet.
Logged in as {{user.alias}}. Log out
Login failed

Register user/reset password

Name needs to be fewer than 32 characters long
Comment needs to be fewer than 600 characters long
{{comment.captcha.word.answer}}

news.err.ee

Opinion
Independence Day: Estonia’s way into the future isn’t a race

There is a lack of connection between the Estonian state, and the people who live here. While it expects a lot of the state, Estonian society doesn’t seem ready to contribute, writes Viktor Trasberg.

Lotman: Security academy would be crucial Estonian identity point in Narva

In an opinion piece published by Eesti Päevaleht, Tallinn University professor Mihhail Lotman found it important to overcome the mental barrier separating Ida-Viru County from the rest of Estonia.