Wednesday, November 07, 2007

Inflatable

Estonian inflation hit 8.5% in October, nice. I don't see much about it in the papers or any comment from the government. I haven't seen a single step by the government to curb inflation (not that they have many options) and I'm starting to wonder if anyone in Eesti understands the economic consequences of high inflation? Ansip proudly stated that they hadn't adopted the Euro yet not because of any internal problem but because of the strict Euro entry requirements, wonder if he still uses that (weak) argument?

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2 Comments:

Blogger Flasher T said...

I think people get too caught up in the term "inflation". The currency is still pegged to the Euro. It's not that the money is losing value globally - it's still freely accepted at the going rate, converted through the Euro; it's just that the cost of living inside the country itself is rising. Which is unfortunate and annoying, but not really the end of the world - especially as long as salaries keep outrunning the inflation. ;) At the end of the day, we're just catching up to Central Europe.

9:55 AM  
Blogger Andres Sehr said...

You are right, the Kroon isn't loosing value but the inflation has a negative impact on exports and foreign investment which could hurt the economy.

10:05 AM  

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