SEB recently forecast that this year's inflation would be 5.2 percent. Does the forecast need to be revised?

If so, then not by much. In the first half of the year, inflation was slightly lower, but the current figures have actually been in line with expectations. July was perhaps even a bit below that. So indeed, the price increases have come with a delay.

How long will the inflation rally last?

It will continue for a while. One thing is how we measure price increases. When we usually talk about inflation, we compare prices to those of the previous year. Because of that, the VAT hike will show up next year, but for now, the larger price increases have already taken place. And when we talk about the key components that influence the consumer price index, there is actually some positive news: there may be a local price war happening on the motor fuel market, and the global outlook does not suggest particularly high oil prices either. So there is something positive here.

Food products are driving price increases, and that has been the case for quite some time. Why is food becoming more expensive so quickly in Estonia?

There is no simple answer here. There are many reasons, and it is likely due to our consumption habits, our geographic location, and also Estonia's very high VAT. There are several factors at play. Simply addressing one component likely will not solve the issue of rising food prices or the high cost of food in general.

Estonian Chamber of Commerce and Industry Chairman of the board Toomas Luman is calling for a reduction in VAT on food products, arguing that only then can it become clear whether lower prices actually reach the end consumer. Has this experiment now become inevitable?

That would be an expensive experiment. If funding is found, a macroanalyst would certainly follow it with interest.

Applying a lower VAT rate on food is definitely an option, but the question is that teachers, rescue workers, and police want to be paid, national defense needs funding, so that money would simply have to come from somewhere else. This is public money we are distributing in one way or another.

The consumer has to make choices. Local produce tends to be more expensive. Could it be that the share of cheaper imported goods in our shopping baskets will start to grow?

We have had an interesting luxury. We are a small country and we love to talk about how much we enjoy consuming local food. I am afraid that, for example, a resident of Luxembourg could not say the same. Since forecasting is part of my job, I am afraid that my forecast is that the share of imported goods will increase, because local production is more expensive due to high wages and energy prices. Consuming Estonian food is increasingly becoming a luxury.

Is our table then too Estonian-focused?

You cannot say it is too Estonian-focused, but that Estonian-mindedness certainly comes at a price. And when we talk about the Estonian population, we have people who never even notice food prices, and we have people who are specifically looking for the cheapest possible goods. For those people, Estonian food is increasingly becoming a luxury.

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