Swedbank expects increasing prices to accelerate to 3 percent as a result of rising excise duties as well as prices of raw materials. At the same time, salaries should increase somewhat faster than prices, the bank’s chief economist, Liis Elmik, said in a press release on Tuesday.
“A rise in prices is good news for many Estonian manufacturing companies, whose revenues were under pressure by a decline in prices for a long time. The sales prices of manufacturing enterprises fell from the start of 2014 until the middle of 2016,” Elmik said.
“In the past few months, producer prices have been moving up, similar to consumer prices. In January producer prices rose by 1.5 percent year on year,” Elmik said. Producer prices had grown more than average in the production of food products and construction materials as well as wood processing, she added.
The change of the Estonian consumer price index in February 2017 increased by 1.3 percent compared to January, and 3.4 percent compared to February of the previous year. Compared to February 2016, goods were 3.7 percent and services 2.7 percent more expensive. Regulated prices of goods and services rose by 7.5 percent, and non-regulated prices by 2.3 percent compared to February of the previous year, Statistics Estonia said on Tuesday.
Fuel prices grew by nearly a quarter in February. The price of oil in euros was 74 percent and excise duty rates 10 percent higher than in the same month last year. “In the coming months, the price of oil probably won’t change much. In the past three months the price of oil stayed at around 55 dollars a barrel. It seems that the deal made between OPEC and Russia to reduce production volumes in the first half of 2017 will hold,” said Elmik.
A rise in prices of dairy products, fish, and sugar had increased the prices of food products. “The prices of food products are increasing around the world. The price index of the Food and Agriculture Organization of the United Nations reached its highest level in the past two years in February. Higher excise duty rates raised the prices of alcohol and tobacco as well,” the economist said.
Editor: Dario Cavegn