Eurostat data confirm Estonia met the Maastricht inflation criterion
17.12.2009, 10:20According to Eurostat's data published yesterday, the average inflation rate in Estonia by the harmonized consumer price index or HCPI was 1% in November, ie within the Maastricht inflation criterion.
The meeting of the criterion is based on the average annual price increase of the past 12 months. The criterion benchmark, which is calculated as the average inflation of the three EU Member States with the lowest inflation plus 1.5 percentage points, was 1.7% in October. The group of three this time consisted of Belgium, France and Cyprus.
In comment, the Estonian central bank Eesti Pank said that upward price pressures will be subdued in near term, irrespective of the planned tax increases. A pick-up in inflation abroad is a risk to inflation in Estonia.
According to the central bank, the most important issue at present is the fiscal deficit criterion. Eesti Pank is of the opinion that this year's deficit will be around 2.8% of GDP and around 2.7% of GDP in 2010. In the medium term, the budget strategy will have to be aimed at achieving a surplus in the new growth cycle and at restoring reserves.
Eesti Pank's assessment of the current situation as regards meeting all the Maastricht criteria is available in the Report on the Adoption of the Euro published December 15. It is a regular publication by Eesti Pank that provides an overview of how Estonia is meeting the Maastricht criteria and of other issues related to the adoption of the euro.