TALLINN — The producer price index of industrial output in Estonia is continuing to climb as the country recovers from the economic crisis. Prices rose by 3.9 percent in July compared to the same time last year.
From the previous month July’s prices were up 0.5 percent, according to the country’s Department of Statistics. July’s price rise was largely influenced by the increase in prices in the production of metal products. Compared to last July, the prices made the strongest rise in the production of timber and other wood products, but also in the production of metal products.
According to Mario Lambing, an analyst at the Ministry of Economy the largest price rise occurred in the production of metal products, where a year ago the prices fell the most.
“The demand has increased for metal products during the recent months and that also reaches the prices of metal products,” Lambing said in a statement to the press.
Foreign demand gave a chance for exporters to increase their prices in foreign markets, according to Lambing. However, the pace of price increase in import prices is slowing down for the second month. In July 2009, the import prices were higher by 8.8 percent, although from the previous month prices remain the same.
Oleg Gross, the owner of largest Estonian supermarket chain OG Elektra told the Pealinn newspaper that the government’s value-added and excise tax increases can be blamed in the price hike.
Gross offered that Estonia should apply progressive income tax, so “people who have a smaller wallet would have more money on their hands.”
“People think that supermarkets get a huge profit, but it is not like that, the competition is immense,” Gross said.
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