The application by Eskom for a 20% tariff increase from mid-2018 poses a significant risk. An increase of this magnitude could increase the inflation trajectory by 0.2-0.3 percentage points, relative to the current assumption of an 8% tariff increase.
The forthcoming enlargement of the euro area to include Estonia demonstrates that the euro area is not a “closed shop”. Its doors are open to the EU Member State that fulfils the necessary preconditions in a sustainable manner.