Swedbank expects rising prices to accelerate in 2017, driven by rising raw material prices as well as higher excise duties, but predicts a change of no more than 3%.
“Compared to the last year, goods and services became 2.2% more expensive in December. Motor fuels made the biggest contribution to the price rise. Motor fuel prices in December were 16% higher than the previous year. The price increase was supported by more expensive oil and higher excise duty rates as well,” chief economist of Swedbank, Liis Elmik, wrote in a press release.
The global price of crude oil in euros had been almost 50% higher than a year ago in December, Elmik said. Swedbank forecasts that the price per barrel will gradually rise, climbing from currently 56 dollars to 63 dollars by the end of 2017.
Of administrative measures, the excise duty hike set for February as well as the requirement to add biocomponents to motor fuels taking effect in May will drive up motor fuel prices this year, the bank expects.
Higher excise duties pushed up the prices of alcoholic beverages and tobacco products in 2016 as well, and food products became more expensive owing to higher prices of fish, vegetables, and dairy products.
“The price increase will accelerate in 2017 due to increasing raw material prices and higher excise duty rates. This year will see substantial increases in excise duties on motor fuels, tobacco and alcoholic beverages. According to our forecast, the 2017 price rise will not exceed 3%, about the same as three years ago in 2013. Between 2014 and 2016 the average price level in Estonia didn’t change,” Elmik wrote.
Editor: Editor: Dario Cavegn