ESTONIA - Europe’s Inflation Hotspot

Arno Froese

At the Estonian capital’s central market, shoppers wince as they read the day’s prices for the summer fruit and vegetables arrayed in boxes before them. 

Amid an inflation storm whipped up by Russia’s invasion of Ukraine and the lingering effects of the pandemic, Estonia has the fastest inflation surge in the eurozone. Recent data showed a 22.7 percent annual spike. 

That massively outstrips the bloc’s average. Prices across the 19 countries which use the euro rose 8.9 percent in the year to the end of July. 

Estonia’s membership of the eurozone means it can’t change interest rates independently to suit its own economic needs, such as raising borrowing costs now to choke off economic activity and so prices.

The Bank of Estonia’s latest official forecasts in June showed it expects inflation to average 15.4 percent in 2022 and 4.3 percent in 2023. Since then, stronger-than-expected inflation has made higher increases look more likely. 

“This kind of reduction in purchasing power of households is worrisome for many,” said Rasmus Kattai, who heads the economic policy and forecasting division at Estonia’s central bank.

Official statistics showed wages in Estonia rose 8.1 percent in the first quarter of this year, up from 4.9 percent growth in the same period of 2021, but still well short of inflation. The central bank expects wage growth to top 10 percent this year and pressures to remain robust into next year. 

Workers doing more hours should make the Estonian economy more effective without feeding inflation, at least in the short term., 11 August 2022

Arno's Commentary

Estonia voted for membership in the European Union, joining the prestigious club in April 2003.

The population of Estonia is a little over 1.2 million, of which 30% speak Russian. Life expectancy stands at 77.8 years, and GDP per capita is $35,600. Quite impressive for the former member of the Soviet Union. 

When analyzing world events, one quickly realizes that each country is dependent on many others to a certain degree. Estonia’s export partners are Finland (13%), Sweden (9%), Latvia (8%), Russia (8%); import partners are Russia (12%), Germany (10%), Finland (9%). Quite interestingly, the diversity of export and import countries has contributed to Estonia’s relative success. Yet—and this is important to point out—the pandemic has had a global effect; no country was exempt. Even one of the richest countries in the world, Switzerland, saw a reduction in per capita GDP from $70,900 in 2019 to $68,400 in 2020.

This article, as many before and will in the future, clearly shows the interdependency of the nations of the world; in this case, the EU.

Inflation is the key word. Again, not limited to Estonia or the European Union, but a global phenomenon.

The future of Estonia? Same as all other nations on planet earth: increase in prosperity, life expectancy, and despite temporary excess inflation, merchandise will be king and dominate planet earth. Revelation 18:23 is applicable: “And the light of a candle shall shine no more at all in thee; and the voice of the bridegroom and of the bride shall be heard no more at all in thee: for thy merchants were the great men of the earth; for by thy sorceries were all nations deceived.”

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

Read more from this author

ContactAbout UsPrivacy and Safety