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Thursday, February 7, 2008

Estonia Inflation 2008

Estonia's inflation rate rose to almost a 10-year high in January, led by an increase in taxes on fuel, alcohol and tobacco. Inflation accelerated to 11 percent, the highest since April, 1998, from 9.6 percent in December, according to the statistics office in Tallinn today. Month on month, prices rose 2.2 percent.

Continued high inflation triggered by rapid economic growth, a consumer spending boom and growing labour shorgages now increases the risk of an abrupt slowdown in Estonia, and puts mounting pressure to do something about the high value of the currency which makes exporting increasingly difficult.

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