According to the chief economist of Bigbank, Raul Eamets, the claims of the head of the consortium institute that Estonia is on the way to more expensive countries in Europe have caused a lively debate, and looking at the change in table- August consumer price targets released on Friday, it must. to say that the price rally will continue.
“Year-on-year, prices have increased by 3.4 percent. Goods rose in price by 1.4 percent, services as much as 6.3 percent. The fact that the increase in the prices of services is faster than the increase in the prices of goods is also easy to understand, because the growth of wages is still high and in the service sector, wages make up a large part of the company’s costs,” said Eamets.
According to him, a high-ranking official of the European Central Bank recently visited Estonia to discuss inflation in the European Union, and one of his tasks was to include hope that an increase prices in Europe contained at least until the end of next year. year. One of the conditions he stated for preventing price increases was the hope that companies would return less profit against increases in input prices. “Simply put, this means that no additional wage costs will be passed on to the consumer through an increase in final prices. Looking at the situation in Estonia, it doesn’t seem like it’s going that way. Rising wages, rising prices. The price increase, in turn, forces the workers to demand higher wages. We’ve gotten into a wage-price spiral,” Eamets said.
If you look at more specific product groups, the prices of both education and health care services have increased by around seven percent, which, according to Eamets, means that free things are not always free. free “Maybe if you want to avoid long queues and turn to private medicine, you have to raise your wallet more than before,” said Eamets.
According to him, the cost of increasing communication services is a separate issue, as much as 10 percent annually. “I have a personal relationship with this topic, because living between the domes of Otepää, I have to admit that the quality of the communication service has decreased many times over the years. The technician called to the scene suggested changing the operator. I think a stronger intervention from the Competition Authority would be needed here,” said Eamets.
