Calm for now in eurozone’s inflation hotspot

Part of the explanation for the lack of a political backlash may be that Estonian salaries have been on a sharp upward trajectory for several years and the economy recovered quickly from the pandemic.

- Daniel Boffey TALLINN

Like his cappuccinos, Taniel Vaaderpass, 33, isn’t bitter. His usually profitable company, OA Coffee, one of Estonia’s biggest bean roasting companies, may have posted a loss for the first time last year, and is set to do so again this year, but he remains sanguine as he sits on the terrace of the cafe he also owns on a cobbled street in old town Tallinn, the country’s capital.

The central causes of his misfortune are a 240% increase in the price of unroasted coffee beans and a 20% surge in the cost of the gas he uses to roast them. This is the reality of living in Europe’s inflation hotspot.

Estonia has an annual inflation rate of 23.2% – the highest in the eurozone, outpacing the average of 8.9%. Vaaderpass has raised his price to supermarkets by 25% over the past eight months and fears he will have to cut costs.