Finance Minister Jürgen Ligi (Reform) told ERR in an interview that the public outcry over inflation is misplaced, arguing that most price increases are beyond the government's control and should not be a focal point of political or economic debate.

"Talking about price increases is as stupid as cursing bad weather when you wake up in the morning," Ligi said.

The minister acknowledged that the recent value-added tax (VAT) hike may have contributed slightly to inflation — by an estimated 1.64 percent — but dismissed the idea that such changes are the primary cause of rising prices. It's "shameless" to make this a central issue when inflation is largely out of our hands, he suggested.

He also noted that retailers' growing profit margins reflect investment in upscale infrastructure, which inevitably gets passed on to consumers. However, Ligi argued that if inflation were truly making people poorer, consumption would have already decreased, easing price pressures.

"If everyone were truly getting poorer, we would see a drop in demand, and that would pull prices down," he said.

Ligi criticized what he described as years of loose fiscal discipline and costly structural reforms, such as making the second pension pillar voluntary, which he believes have exacerbated inflationary pressures. He expressed particular concern about the impact on public-sector workers, whose wages have struggled to keep pace with rising costs.

The minister rhetorically asked whether those complaining about prices and taxes haven't heard about the need to raise defense spending to 5 percent of GDP.

He also raised questions about the reliability of official inflation statistics, citing gaps in data collection — especially when it comes to discounts and promotional pricing.

Looking ahead, Ligi confirmed that Estonia will continue to use a program- or activities-based budgeting system, aimed at improving transparency and making spending decisions more comprehensible to the public. However, the finance minister said the government will provide clearer justifications for its expenditures in upcoming budget plans.

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