Consumer spending is breaking records, the Bank of Estonia has said. Prices have risen, but people are also making up for lost time during the coronavirus pandemic.
During the second quarter, €660 million worth of goods and services were purchased in Estonia, the bank's data shows, Tuesday's "Aktuaalne kaamera" reported. This is almost 25 percent more than in the second quarter last year.
"One [reason] is definitely the easing of corona restrictions, or it would be more correct to say the disappearance of, that people can now go shopping freely, can travel freely. /.../ But another reason is definitely also rising prices, i.e. for the same goods, you are leaving significantly more money in the store compared to before," said Tiina Soosalu, an expert in the Bank of Estonia's payment systems department.
SEB bank says spending has increased across the board.
"We see growth in all areas. The biggest growth we can see is in fuel and transport, followed by restaurants and fast food. In both cases, growth has reached 30 percent compared to the pre-pandemic period, i.e. the first half of 2019," said Triin Raudsepp, SEB's manager for private customers.
She said young people aged 18 to 25 years old are spending the most money on food and travel. The growth in this group is 82 percent.
People have also been withdrawing more cash.
"One reason is that it is actually wise to keep some cash in your wallet. /.../ And the second reason is definitely what is happening in Ukraine. We think that Estonians have therefore started to increase their cash reserves a little more," the Bank of Estonia's Tiina Soosalu said.
Analysts said is hard to predict how spending will be affected in the autumn.
Editor: Merili Nael, Helen Wright