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Estonia clocks fastest inflation in the Eurozone at 20.1 percent

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Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#61

Post by piva00 »

rawbot wrote: post #35

Doesnt' 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.

When 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...

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#62

Post by martin_a »

lekevicius wrote: post #34
throwaway4good wrote: post #27

I 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.

Here 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.

Prices are probably up because now everybody wants to have LNG and therefore money is to be made and global prices are on the rise.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#63

Post by jonasdegendt »

yodsanklai wrote: post #36

I 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 el…

> Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too

I'm not in a place to fetch any sources right now, but hasn't it been proven that wage growth has not been keeping up with increases in money supply, or inflation over the last couple of decades? Particularly for manual labor or service jobs.

You seem to assume that one would automatically track the other, but the increased supply in money isn't going to consumers directly. Not to mention that even if it would "trickle down" at some point, your wage increase lags in perspective to inflation and you'd always be getting hit with a reduction in purchasing power for some period of time.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#64

Post by arguru »

Estonian 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

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#65

Post by antupis »

yodsanklai wrote: post #36

I 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 el…

There is expected and unexpected inflation https://www.oxfordreference.com/view/10.1093/oi/authority.20...

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#66

Post by troad »

onlyrealcuzzo wrote: post #49
yodsanklai wrote: post #36

I 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 el…

Inflation 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.

> just measure corporate revenues by sector to PPI by sector. Or CPI to HH or personal income

This sounds very cryptic to me. Could someone explain what this means, and why it measures changes in purchasing power?

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#67

Post by toxik »

yuropeen wrote: post #52
toxik wrote: post #43

Earlier quoted context omitted.

That is completely normal, though. Inflation is not the exact price adjustment of every basket of goods over time, that is simply not possible to represent in a single number - rather, it is some arbitrarily chosen basket of goods meant to represent an average household. It does not have to be perfect to be meaningful.

> That is completely normal, though. If not using basics like food, fuel, and pricing on rent or mortgage - what are we basing the numbers off of? If it's the stable price of a Spotify subscription, rather than real goods needed to survive, something is horribly off.

That is exactly what inflation is computed from. Like literally.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#68

Post by state_less »

Can 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_r...

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#70

Post by jyriand »

cameronh90 wrote: post #28
daeroth wrote: post #13

Earlier quoted context omitted.

Also 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.

Why would they do that? Isn't that setting them up for a pension crisis in the future?

You will still get the state pension. The part you are able to cash out is managed by other funds(banks etc) and it would act as an extra to state offered pension.
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