The cost of living in Estonia continues to rise, placing significant pressure on household budgets. Food and service prices are climbing steadily, while taxes and defense expenditures are adding to the strain. Despite this, President Alar Karis notes that citizens largely understand the rationale behind higher taxes, which are being funneled into strengthening the country’s defense capabilities.

Nevertheless, for most Estonians, the primary concern remains the rising cost of everyday goods and services. According to statistics, inflation in May 2025 reached approximately 4.6% year-on-year, with food prices increasing by about 7%. This has had a tangible impact on the standard of living, especially in lower-income regions such as Narva.

Research confirms that rising food prices are the main source of anxiety for Estonian residents. Moreover, surveys by Postimees indicate that nearly half of respondents in 2025 reported a decline in their financial well-being—chiefly due to the increasing cost of groceries.

Many citizens point out that tax hikes—such as increases in VAT and excise duties—are adding further pressure on prices and, in turn, on family budgets. In a time of economic uncertainty and geopolitical tension, the government is allocating significant funds to defense—an investment authorities view as essential for national security.

However, in day-to-day life, people are faced with a difficult balancing act: how to allocate limited financial resources between immediate needs and national priorities. This dilemma is felt especially acutely in Narva, where a large portion of the population lives on modest incomes.

Experts stress that social support programs and inflation-curbing measures are crucial to easing the burden on citizens. The government has expressed its willingness to consider such initiatives in order to maintain a balance between national security and the population’s quality of life.

By Scooby