tarbijahindlikkuse

Tarbijahindlikkuse, meaning consumer price inflation in Estonian, refers to the rate at which the general level of prices for goods and services is rising. This rise in prices erodes the purchasing power of currency. When the consumer price index increases, each unit of currency buys fewer goods and services. Therefore, inflation reflects a reduction in the purchasing power per unit of money.

The Estonian Consumer Price Index (CPI) is calculated and published by Statistics Estonia. It measures the average change over time in the prices of a basket of goods and services commonly purchased by households. This basket includes items such as food, housing, transportation, clothing, healthcare, and recreation.

Several factors can contribute to tarbijahindlikkus. Demand-pull inflation occurs when there is more money chasing too few goods. Cost-push inflation happens when the cost of producing goods and services increases, leading businesses to raise prices. Imported inflation can also play a role, particularly for countries like Estonia that rely on imports.

Managing tarbijahindlikkus is a key objective of monetary policy for the European Central Bank, as Estonia is part of the Eurozone. High and unpredictable inflation can destabilize an economy, making it difficult for businesses to plan and for consumers to budget. Conversely, very low inflation or deflation (a decrease in prices) can also be problematic, potentially leading to reduced consumer spending and economic stagnation. The goal is generally to maintain stable and moderate inflation.