Ministry of Finance: Taxes increased inflation by one percent in July ({{commentsTotal}})

Photo is illustrative.
Photo is illustrative. Source: (Ministry of Finance)

Various tax measures increased inflation by one percent in July, according to Kristjan Pungas, an analyst at the Ministry of Finance's Fiscal Policy Department.

"Inflation will remain fast during the second half of the year due to additional tax measures and the strong increase in food prices," Pungas said in a ministry press release. "In July, various tax measures contributed approximately one percent to inflation."

According to the ministry analyst, the increase in prices in July rose to 3.6 percent, the year's highest, due to an additional hike in the excise duty on low-alcohol beverages. "Despite collected alcohol stocks, the excise duty hike was to a great extent added to final prices," Pungas said. "In other words, retailers increased their profit margin by the hike in excise duty."

Consumer prices were also impacted by the continued increase in the price of services, an increase in the price of energy affected by higher electricity prices on the stock market and an increase in some food prices, he said.

Pungas added that, among other things, the increase in the price of services was impacted by more active tourism in relation to Estonia's presidency of the Council of the EU, which officially began on July 1, as well as colder temperatures in July, which led to an increase in the prices of vacation packages and plane tickets. "Plane tickets in July were approximately one third more expensive than one year ago," he noted.

Statistics Estonia on Monday morning published figures concerning inflation in July. The July consumer price index had increased 3.6 percent on year and 0.7 percent on month; the last time annual inflation was this high was in June 2013.

Editor: Aili Vahtla

Source: BNS



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