SEB economic analyst Mihkel Nestor said this was the case: "Especially when we compare ourselves with Latvia and Lithuania, where inflation has essentially dropped close to zero," he told "Aktuaalne kaamera."

As for the causes, Nestor said "the clearest and most objective ... is the increase in VAT. Inevitably, when our taxes rise and others' do not, our goods become more expensive as a result."

Kaimo Niitaru, a chief buyer at Prisma. noted the pace of price increases is accelerating, putting the food and non-alcoholic drinks price rise for August at 2.9 percent, over half of which is the result of the VAT hike.

Prices will also rise somewhat next year for the same reason, he said.

The telecommunications sector, with inflation of 10.5 percent in August, was the most-affected sector.

One operator, Telia, has said this was the result of prices not having significantly gone for several years, whereas they are now catching up and the price increase is projected to continue at the same pace.

Telia Eesti CEO Holger Haljand told "Aktuaalne kaamera": "There hasn't been any noticeable acceleration in price increases in the telecommunications sector, but we need to monitor the economic situation to see what happens with costs and other inflationary factors. "

"If we look at overall price rises over the last three years, telecommunications prices haven't grown faster than the general rate of inflation," Haljand went on.

On the other hand, Mihkel Nestor at SEB said, inflation seems to be creating the expectation of and tolerance for further price rises.

"In the Estonian context, it seems to me that companies find it viable to raise prices, as inflation has been a widely talked about theme in recent years," he said.

An additional issue in Estonia is the small market, often an oligopoly or similar.

"This means when something gets more expensive, it's not exactly shocking news to consumers, especially in sectors where there isn't intense competition with hundreds of providers fiercely competing on price," Nestor added

Last month brought an on-year CPI rise of 3.2 percent according Statistics Estonia, while between July and August this year, the CPI rose by 0.4 percent.

The bulk of the rise was driven by services, and goods saw smaller price hikes.

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