Starting January 1, sales tax will increase from 20% to 22%. Food prices in stores will mainly change starting January 2nd. Traders speak of an average price increase of 1.7%. This will make Estonian consumers poorer, which could create pressure for wage increases and new price increases, said Lenno Uusküla, chief economist at Luminor.
From the beginning of the year prices will vary due to the increase in VAT. Kristjan Anderson, Selver’s corporate accounting manager, said the changes affect a few thousand products. The price elves are already busy writing new labels.
“The Elves have made the most pricing changes in the program, but they won’t go into effect until January 2024. Perhaps the largest number of changes are for the first few campaigns of the year, which have slightly different pricing,” Anderson said.
“The first changes have already reached the prices of industrial goods, which are less price sensitive. But all food products will remain in the new year, so you will see the first changes in shops from January 2nd,” said Marilin Jürisson, from Rimi Estonia . Purchasing Manager.
How much prices will rise on average by January 2, traders cannot say at the moment.
“It is very difficult to say such an average variation. The Estonian commercial market is very competitive. It regulates how much you can collect, whether it reaches 2% or in some places it is not below,” Anderson said.
Buyers have reason to watch price tags carefully in the new year. In each major product group there are also individual products or special offers for which prices will not change in the new year. This way, the price of other products will increase more.
“For example, I can mention plastic milk, plastic bags, some of the most popular breads and other dairy products. An average price change of 1.7% cannot be achieved for all products, so the change for some products is slightly greater,” Anderson said.
Luminor’s chief economist Lenno Uusküla said Estonians consume most of their income and cannot save.
“People will become poorer by this 1.7%. And the purchasing power of their wages will decline. And from here will come the pressure for wage increases. And if wages start to rise, then there could be another round of price increases.” Uuskula said.
From January 1, the excise duty on alcohol and the depot circulation tax for drinks manufacturers will also increase by 5%. Therefore, in addition to VAT, excisable products are subject to an increase in the producer price
2023-12-29 19:08:00
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