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Estonia clocks fastest inflation in the Eurozone at 20.1 percent
- withinboredom 4y agoI’m currently visiting family in the US and inflation has to be at least 150% since I was here last year.
- silverPoodle 4y agoAre there public information, which data is used for inflation calculation per country?
- sushibowl 4y agoUsually European countries would use the HICP: https://en.wikipedia.org/wiki/Harmonised_Index_of_Consumer_Prices https://en.wikipedia.org/wiki/Harmonised_Index_of_Consumer_P... This ought to ensure inflation rates are at least comparable on some level between countries.
- silverPoodle 4y agoThank you!
- possiblelion 4y agoCaused to some extent by energy prices, but also worth noting the "most-startups-per-capita" effect
- daeroth 4y agoAlso last year there was a reform in the pension system. You can now choose to exit the pension system and have a large part of your fund liquidated. Around 14% of the population decided to use this and cash out their future pensions in 2021. Not sure how much of these funds got spent where but certainly it had some effect on the real-estate prices.
- cameronh90 4y agoWhy would they do that? Isn't that setting them up for a pension crisis in the future?
- pfortuny 4y agoYou can cash it out and manage your investment yourself. I interpret that small 14% as most of them doing so. Of course, I have no idea.
- sharpneli 4y agoWhat happens if you essentially waste all the money? Will you be left totally without pension or will others foot the bill?
- tauntz 4y agoThe pension system in Estonia has 3 tiers. Everyone has the 1st, basic tier ("State pension"). Then there's the 2nd tier called the "Mandatory funded pension" which is the one that held the most savings and was "freed" now and then there's the 3rd one called "Supplementary funded pension" which has always been "free" as in you can stuff money in there and you can take it out as well. People who blew their 2nd tier on a new car/TV/vacation/paying existing loans will still have the 1st tier but that will only guarantee a pension that's big enough that you won't directly starve but it's not big enough to actually let you live either.
- daeroth 4y agoYour pension would be substantially smaller. Technically the pension fund consists of 3 parts: 1) Shared pool of funds. Current workforce pays into the pool and current pensioners get payouts from this pool. You can't liquidate this part of your fund as there is no part that is fully "yours" 2) Individual pool - part of your salary automatically gets put into this pool and invested into the pension fund of your choosing. THIS is the part that people can now liquidate before they reach the pension age 3) Individual pool of extra deposits - You can choose to add money into this pool and incest it in a pension fund. If you withdraw funds during your pension age then no gains tax is applied on the profits. But you can liquidate the fund at any point as long as you pay the gains tax. So these citizens/residents will only be left with the first option as their pension payments.
- raptorraver 4y agoCan you elaborate what you mean?
- capableweb 4y agoEstonia has for quite some time tried to establish itself as a "Startup HQ" for startups both in Estonia and from the world outside of Estonia. As a result, Estonia has the 3rd highest startups-per-capita compared to other countries in Europe.
- throwaway4good 4y agoAnd exactly how would that cause higher inflation?????
- scrollaway 4y agoA higher share of the gdp is startups than individuals.
- tauntz 4y agoIt affects the income gap. People in the startup sector earn _much_ more than other sectors - the difference is, if I'm not wrong, one of the biggest in the EU. So it creates a) a lot of inequality and b) drives up prices of certain goods (houses, apartments) because there's a noticeable % of the population in the startup sector who has now their sweet exit money that's looking for a new home.
- throwaway4good 4y ago"People in the startup sector earn _much_ more than other sectors - the difference is, if I'm not wrong, one of the biggest in the EU." Do you have a source for this claim? I would be very surprised if that was true.
- ChuckNorris89 4y ago
- davzie 4y agoProbably the only country that is being honest about its inflation amount then.
- toxik 4y agoDo you mean to say that other European countries are lying? This proposition seems knee jerk. Inflation can be computed by anyone, so I don’t even understand how you could lie about it.
- throw457 4y agoBecause he wants it to be. It’s way easier to blame someone acting nefarious than living in reality.
- davzie 4y agoWe have 9% inflation in the UK but the reality of the costs of things that you need to live a relatively simple life (food, heating oil, fuel costs), have all gone up way more than 9%. A shop that used to cost me £80 a week now cannot be had for under £110. So you can calculate them all you like and look at the data, but the reality in my life is that prices have risen way beyond the 9% we're told is the amount.
- rawbot 4y agoSame here in Germany. My napkin calculations on food & groceries is at least 30%.
- asah 4y agoannualized ?
- jgilias 4y agoYes, annualized.
- tmikaeld 4y agoSweden was at 6.4% in April, but they excluded energy [0]; in these graphs energy is included, so shouldn't Sweden be listed? [0] https://scb.se/hitta-statistik/statistik-efter-amne/priser-och-konsumtion/konsumentprisindex/konsumentprisindex-kpi/pong/statistiknyhet/konsumentprisindex-kpi-april-2022/ https://scb.se/hitta-statistik/statistik-efter-amne/priser-o...
- throwaway4good 4y agoIt is says euro zone - sweden has its own currency and independent monetary policy.
- piva00 4y agoSweden = Swedish Krona, not Eurozone. Thanks for sharing the stats, I hadn't looked into it in months and noticed that books got quite expensive on my latest purchase, glad to see it wasn't just my impression.
- viceroyalbean 4y agoFrom what I can tell the 6.4% includes energy. The measure that doesn't include energy (KPIF-XE) is at 4.5%.
- ehvatum 4y agoWorth noting that Estonia is on the Euro.
- tokai 4y agoThats what eurozone means.
- yuropeen 4y agoAs a non-Euro I would have easily confused that with something like "Schengen Zone" or one of the many other political subdivisions of which European Union nations seem to flitter in or out of depending on the political winds. I'm thankful for the obvious comment.
- tokai 4y agoYou see the zone for the euro is the eurozone. The zone that was agreed upon in the city of Schengen is the Schengen Zone. Everything is ordered and organized in the European Union ;P
- em500 4y agoWikipedia provides a handy Euler diagram: https://en.wikipedia.org/wiki/File:Supranational_European_Bodies-en.svg https://en.wikipedia.org/wiki/File:Supranational_European_Bo...
- pjc50 4y agoYes, I had to check that. Question which I won't expect the "inflation is always and only caused by money printing" believers to answer: how is there different inflation in different Eurozone countries?
- gruez 4y ago> Question which I won't expect the "inflation is always and only caused by money printing" believers Who are these people? I’ve obviously heard of people complaining about fed money printing causing inflation, but I never heard anyone go as far to say that’s the only cause of inflation.
- deleted 4y ago[deleted]
- yakubin 4y agoPSA: in order to see any numbers on the diagram, you need to hover a bar with the mouse pointer. Genius design.
- throwaway4good 4y agoI am guessing the Baltic countries are hit hard by the Russia sanctions and the lack of cheap energy and food imports that has to come from somewhere else now.
- lekevicius 4y agoHere in Lithuania we were already independent from Russian gas and oil (lesson learned over the decades), and had liquid natural gas terminal for a few years. But inflation is also very high.
- unicornfinder 4y agoThing is even if you're not using Russian gas directly, prices are still going to be influenced by the global gas market (and the wider global economy in general).
- onlyrealcuzzo 4y agoIIUC, Russian oil is roughly the same price as it was before the invasion: https://www.statista.com/statistics/1112243/urals-crude-oil-price/ https://www.statista.com/statistics/1112243/urals-crude-oil-... Other oil has gone up so much because everyone is switching off Russian oil. Russian oil is not going up. So it's actually not a bad time to be a Russian oil consumer...
- Cthulhu_ 4y agoRussian oil and gas should actually be cheaper because demand has dropped sharply. Anyway it's a very bad time to be a Russian oil consumer, because you'll be funding an unprovoked invasion and the countries that have sanctioned Russia may not want to deal with you.
- onlyrealcuzzo 4y agoIt's 50% cheaper WRT all other oil...
- deepsun 4y agoWow, 20 percent is close to hyperinflation.
- TheGigaChad 4y ago
- oldsecondhand 4y agoHyperinflation is 50% MONTHLY. This is 20% annualized.
- Aachen 4y agoWhich translates to 13 000 percent yearly, amazingly. Compound numbers often surprise me.
- throw457 4y agoYou should at least know what hyperinflation is before you make statements.
- datashaman 4y ago> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
- deepsun 4y agoI know it first-hand, lived through it after the fall of USSR. Hovewer, I don't know the exact threshold to be considered "hyper", that's right.
- pseingatl 4y agohighest, not fastest: percent is not a unit of time.
- throw0101a 4y agoI blame the Fed. /s
- throwaway4good 4y agoYeah - ecb is following the fed.
- rawbot 4y agoDoesnt' every country calculate their inflation separately? Because living in Germany, that 7% is laughable. Nothing has risen by that little of an amount. Not food, rent, petrol, etc. Well, I do know of something that has risen to less than 7%: salaries.
- rjzzleep 4y agoYeah I don't get that either. Here's the German Federal Statical Office in April(It's worse now). A lot of food markets have increased prices over 50%. Electricity just last year doubled in price. And a lot of these commodities are absolutely crucial for the German economy. "Import prices in Germany increased 31.7% year-on-year in April of 2022, the new highest since the first oil crisis in 1974 and compared with a 31.2% increase in March and forecasts of 32%. Energy imports were 157.4% more expensive than in April 2021, namely natural gas (+301.2%) and crude oil (+77.5%). Excluding crude oil and mineral oil products, import prices increased by 27.6% compared with a year earlier. Other price increases were also recorded for fertilizers and nitrogen (+185.6%); aluminum (+78.4%); iron, steel and ferroalloys (+58%); plastics (+27.7%); machines (+7.9%); motor vehicles and parts (+5.7%); food (+20.7%); pharmaceuticals (+9.5%); green coffee (+68.6%) and cereals (+55.8%). Compared to the previous month, import prices rose 1.8%, lower than 5.7% in March. source: Federal Statistical Office" https://tradingeconomics.com/germany/import-prices https://tradingeconomics.com/germany/import-prices
- piva00 4y agoWhen I look at the Swedish numbers I feel the same and then I see that prices went down for "photography, audiovisual and computer equipment" and... Nothing else. Fuel is up 40+%, food by 8-10%, housing by 2%, electricity by 30+%. How the fuck do we end up with a normalised rate of inflation of 6-7%?? I do need to do proper research on the models because just using my common sense it doesn't make any fucking sense...
- jokethrowaway 4y agoIt's called "politician's lies"
- 4y ago
- yodsanklai 4y agoI don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything else is unchanged. In both cases, there's inflation according to the definition, but the second case is very different than the first, and it doesn't impact everybody equally (consumer vs saver). I must misunderstand something because I never see this distinction in the medias.
- mft_ 4y agoHave salaries increased over recent years in line with the increase in money supply? I’ve certainly not seen this, but this is only anecdata. At my (consumer) level, the only obvious effect I can think of has been cheaper interest rates for loans.
- lupire 4y agoDuring Covid, wages grew faster than ever in recent history, but slower than prices. On average.
- zeroonetwothree 4y agoThey have not. However I would expect it to even out in the near future. Real wages won’t stay down for long.
- onlyrealcuzzo 4y agoInflation isn't meant to measure the change in consumer purchasing power. There's CPI and PPI and other measures to measure how prices change to different groups. If you want to measure the change in purchasing power just measure corporate revenues by sector to PPI by sector. Or CPI to HH or personal income.
- troad 4y ago
- pearjuice 4y agoI'm wondering what kind of investment vehicle or financial strategy you can possibly use to counter these kind of percentages reliably.
- ChuckNorris89 4y agoFor EU the best seems like real estate in desirable areas.
- Avamander 4y agoReal estate is up 200% or more in many countries.
- arguru 4y agoEstonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-actors wrote a song [0], that describes our history and overall state of mind quite accurately I think :) The video has English subtitles as well. [0] https://www.youtube.com/watch?v=aADjmpAHEYE https://www.youtube.com/watch?v=aADjmpAHEYE
- Tade0 4y ago> However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. I think this is a generally post-soviet thing.
- BlargMcLarg 4y agoEh, this is the attitude in most of Western Europe as well
- gpderetta 4y agoIn Italy the attitude is so prevalent (not entirely without reasons) that we have a pithy expression to satirize it: "Piove, governo ladro" (It’s raining, thieving government!)
- Cthulhu_ 4y agoI mean it's not like we have much of a choice. It's the result of decades of progress, economic development and home comforts as a result of an okayish relationship with Russia and their natural resources, which "suddenly" collapsed (it wasn't actually that sudden).
- donogh 4y agoAgreed; Ireland is very similar
- state_less 4y agoCan anyone confirm mortgage rates in Estonia? This site[1] says ~ 2% mortgage rate, which means a -18% real rate, further pushing demand for real assets instead of paper debts. I think the US is closer to neutral, but we still have a negative mortgage real rate at the current inflation level. 1.https://www.theglobaleconomy.com/Estonia/mortgage_interest_rate/ https://www.theglobaleconomy.com/Estonia/mortgage_interest_r...
- karlerss 4y agoCan confirm. Mine is 1.63% + 6mo euribor rate (which was just raised over 0%). When you have the future possibility of 5% mortages, people will think twice about buying the currently expensive real assets. On the other hand - can't say that real estate is exactly overvalued - recently they've been driven by rising construction and material costs.
- state_less 4y agoThanks for confirming euro folks. Good luck on the other side of the pond - hopefully we’ll stabilize these prices over time.
- tpm 4y agoCan't confirm Estonia but certainly looks credible for Slovakia (1.35% - mine is 0.9%). But beware those are variable rates, so not fixed over the whole mortgage timespan but like 1/3/5/10 years, with 10 years being unusual and also the highest rate. So a lot of people who took out mortgages with 0.6% fixed for 1 or 3 years will have a hard time as the rates will climb significantly soon.
- zen_1 4y agoAs someone who's not even thinking of buying a house, do fixed rate, fixed term mortgages even exist? It seems variable rate mortgages, while making financing more widely accessible, have caused their fair share of financial issues/instability.
- vogre 4y agoEU has 37% PPI. https://ru.investing.com/economic-calendar/ppi-935 https://ru.investing.com/economic-calendar/ppi-935 It usually converts to CPI in 3-6 months
- brodock 4y agoConsidering Estonia is one of the most libertarian country, they are likely the only one actually measuring inflation correctly in the EU zone, not just playing with the index to make it fit a certain narrative.
- foverzar 4y ago> Considering Estonia is one of the most libertarian country In what sense and compared to what exactly?
- Avamander 4y agoYou can't play with the index much if it's a few dozen SQL queries. I'm not even simplifying it too much, the metrics used for calculating inflation are mostly available in very high fidelity. Income, import prices, price of goods and transportation etc. So for example when other countries calculate Gini index based on a reasonable sample, Estonia could do it across the entire population.
- nathias 4y agoMore like, Estonia cheats the least when measuring inflation. My personal basket of goods is twice the price it was last year.
- ericholscher 4y agoYour housing costs have doubled?
- nathias 4y agoI mean just the food, but yes housing has actually tripled in last 5 years.
- kosyblysk666 4y agoscare pepole, lock down everything, print all the money you can,,,,,,then act surprised when inflation hits humans..... :facepalm:
- mhitza 4y agoYour comment is a sarcastic take, but comments along those lines were what some of us pointed out last year. While people were under lockdown, money didn't circulate enough for it to be reflective in terms of inflation (excepting the stock/crypto market). EU opened up briefly for the mid-Summer (covid pass) till mid-Autumn and then closed back up. Then some countries gave up on the covid battle and started reopening during the winter holidays and stayed open since.
- happytoexplain 4y agoSurprise? Nobody thought there would be no economic consequences to lockdowns - you're painting a picture of some irrational social/political adversary, perhaps based on a cherry-picked opinion you've seen, or perhaps from whole cloth.
- welkj23jOIJ3 4y agoInflation is highly manipulated by goverment and is usually 2x lower than real inflation. On the following site you can check the inflation calculated based on the past methods (before 1990): http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts as you can see, inflation calculated using the old method is 2x higher than the current one (8% vs 16%)
- once_inc 4y agoShadowstats's methodology is not uncontested by the way. That said, CPI is actively manipulated by governments worldwide.
- onlyrealcuzzo 4y agoThe problem with the Fed's measure is there's too much substitution. The problem with Shadowstats is that there isn't any substitution. If the price of gold goes up - but you can get your cavities filled with a way cheaper and better substitute - that seems like a win. If the price of silicon goes up, but you can get an exponentially more powerful computer for the same price that uses less energy (because the chip size shrinks) - that seems like a huge win. If the price of cars is flat - but the safety ratings, reliability, and gas mileage have improved enormously, that seems like a win. Then you have things like food and housing where the substitutes actually make things (arguably) worse... One thing is clear - if you use Shadowstats measures of inflation - the US economy is ~25-75% smaller than it was in the 80s. This idea is absurd.
- tablespoon 4y ago> Inflation is highly manipulated by goverment and is usually 2x lower than real inflation. You just seem to be generically responding to the keyword "inflation." I would bet this rate is almost completely driven by fallout from a nearby war with a major energy exporter that's resulting in embargoes and boycotts: > Energy prices continue to have the greatest effect in May, with price advance there jumping from 37.5 percent in April to 39.2 percent in May. Estonia is quite close to that exporter, and I'd imagine they've been affected more than some other countries.
- agilob 4y agoHow does inflation in Estonia impact on inflation of the rest of eurozone? Say that EE has inflation 20%, but X has 2% and they use the same currency. Will eventually (within weeks of months) impact of EE increase inflation in X?
- raphaelj 4y agoI guess it all goes down to the fraction of oil and natural gas in the average income of these countries. If your economy is more reliant on these (e.g. for heating, electricity or transport), all prices will go up significantly more compared to a country that is less reliant on these (e.g. because of nuclear/renewable, better energy efficiency, less heating required ...).
- Proven 4y ago
- dontbenebby 4y agoMaybe issue is similar to the USA -- shared currency, wildly different costs of living. That and the Germans or whatever think inflation caused WWII, so they... pushed a bunch of stupid policies that caused inflation because they also are scared of atoms. We could have built safe breeder reactors to bridge the gap to solar, instead of, but Jill Stein's Russian Dolls "roved" across America, flinging Russian money around in such a manner we're gonna have to protest so they ban fracking in the parks next to playgrounds after a decade of being placed on lists for things as simple as attending a documentary where they show video of some poor bastard being able to set his tapwater on fire.[1] --- Citations: [1] Вас повесят за шею до смерти на заправке, как Муссолини и его напарника, если вы не исправите свое поведение, "товарищи" (саркастические цитаты из пальцев) И извините за двусмысленность... это машинный перевод, но слова от человека.
- 88840-8855 4y agoWell, that's the price people have to pay for values and democracy.
- pelasaco 4y agoIn Germany, could be better but could be worse too, explaining: Since around 50 percent of the price of fuel in Germany is made up of taxation, tax cuts can actually make a significant difference. The tax burden on petrol in Germany should be temporarily reduced by 32 cents/l, including VAT. Taxes on diesel should be reduced by around 15 cents/l with VAT. However, the oil companies are not passing this discount to the consumers, making themselves (oil companies) the real winners right now.
- madboston 4y agoYesterday I saw this video on YouTube from ColdFusion about Sri Lanka's situation. I wonder how many countries are on the verge of such collapse due to rising inflation. Most of the "rich" countries will survive this situation but at what cost really? https://www.youtube.com/watch?v=W5zxYDHwf-Y https://www.youtube.com/watch?v=W5zxYDHwf-Y
- inflationwatch 4y agoYou can compare the official release against scraped supermarket data. In general, official statistics align with the reality of consumers. https://www.econdb.com/widget/supermarket-benchmark/ https://www.econdb.com/widget/supermarket-benchmark/
- deleted 4y ago[deleted]
- bannedbybros 4y ago
- permo-w 4y agoYou have to feel for them. Estonia is already a country with a low wage to price level ratio. A lot of people there take a full time job and a part time job just to support their families