Price level in Estonia changed very little in 2009
Martin Lindpere, Eesti Pank, economist
According to Statistics Estonia, the cost of the consumer basket increased by 0.1% in December and was 1.7% cheaper year-on-year.
Global commodity markets underwent extensive price fluctuations last year. The economic downturn made many companies in Estonia change their price and wage formation principles. The prices of several monopoly services, on the other hand, remained unchanged.
The trade margin, i.e., mark-up of wholesalers in Estonia declined by nearly 2 percentage points as the average of the first three quarters of 2009, but did not change as regards retailers. Food is worth special mention here, since in the first nine months of 2009 its margin rose by 4 percentage points in retail, and decreased in the same extent in wholesale. Thus, the price decline did not reach end consumers to the full.
The harmonised consumer basket cost increased by 0.2% as the 2009 average. Eesti Pank's last year's spring forecast expected a 0.5% cheapening for 2009. Due to tax increases in the summer, the assessment was revised upwards in the autumn forecast to a 0.1% rise in prices.
According to Eesti Pank's autumn forecast, the cost of the harmonised consumer basket will remain at nearly the same level in 2010 compared to 2009. Although there will be several tax increases, prices should continue to be adjusted in the services sector. There are risks of commodities price growth in the external environment.
The weight structure of the harmonised consumer price index considers also expenditure made by tourists in Estonia, whereas the consumer price index only looks at the structure of the average expenditure of Estonia's residents.
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