Randveer stated that the price level of goods and services purchased by Estonian consumers was approximately 98 percent of the European Union average last year, placing Estonia 12th within the EU based on price levels.

"When looking at all European countries for which price level assessments are available, we rank 15th. Last year, the price levels in the ten EU countries with the most expensive goods and services ranged from 110 to 143 percent of the EU average," he highlighted.

Randveer added that the highest prices were in Denmark (143 percent), while Germany ranked tenth with prices at 110 percent of the average.

"The future relative price level in Estonia depends on the expected rate of price growth compared to other countries," he said.

According to a forecast released by the International Monetary Fund in April of this year, the average price level in Estonia and the EU is expected to increase by 18 percent and 14 percent, respectively, by 2029. This projection suggests that Estonia's expected price growth over the next five to six years will be slightly higher than in the EU, resulting in Estonia's price level reaching approximately 102 percent of the EU average by 2029.

"If our price level had been 102 percent of the EU average in 2023, we would have ranked 11th instead of 12th among EU countries, and 14th among all European countries," Randveer noted.

On Tuesday, Peeter Raudsepp, head of the Estonian Institute of Economic Research, presented a recent overview and forecast of Estonia's economic situation. He stated that, relative to local income levels, prices in Estonia are very high: food prices are at 109 percent of the EU average, compared to 110 percent in Finland and 105 percent in Sweden.

Regarding clothing and footwear, Raudsepp described the situation as much worse, with prices at 117 percent of the EU average, placing Estonia among the top three in the EU. He suggested that Estonia is moving toward becoming one of the five most expensive countries in Europe.

However, Ardo Hansson, the prime minister's economic adviser, disagreed with this assessment, pointing out that, based on the latest Eurostat data, Estonia's price level last year was 2.1 percent below the EU average. "Including Switzerland, Iceland and Norway, Estonia ranks 15th in Europe. Within the EU, we are 12th."

Hansson explained that for Estonia to reach the fifth place in Europe, its price level would need to grow 37 percent faster than in Luxembourg. Within the EU, achieving fifth place would require a 21 percent faster growth than in the Netherlands.

"With the current inflation rate of 2.5 percent, which is approximately the same as the EU average, this is not foreseeable, even with the addition of security taxes," Hansson concluded.

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