Inflation

Updated: 14 Jan 2020
Next update: 19 Feb 2020

The Consumer Price Index is used as a general measure of inflation. The Consumer Price Index describes the price development of goods and services purchased in Finland by households resident in Finland. The Consumer Price Index is calculated with a method in which the prices of different commodities are weighed together with their shares of consumption.

Consumer price indices that are reviewed at intervals of a fixed number of years are suitable for short-term examinations. The Cost-of-living Index is a long time series calculated from the latest Consumer Price Index and its development, therefore, follows the Consumer Price Index. Many rents, such as those on dwellings, business premises or land, are usually tied to the Cost-of-living Index.

Along with economic growth, the unemployment trend and the fiscal balance, inflation has a key impact on economic conditions in Finland. High and volatile inflation is detrimental to the economy, consumers and businesses. An effort is made to stabilise the development of inflation, because instability of inflation causes market uncertainty and inefficiency, and adversely affects the planning of investments and savings. The effects of inflation are reflected in ordinary consumers’ purchasing behaviour and purchasing power, and also in companies’ willingness to invest.

   

Inflation 0.9 per cent in December

The year-on-year change in consumer prices calculated by Statistics Finland was 0.9 per cent in December. In November inflation stood at 0.7 per cent. The increase in inflation was caused by higher prices of electricity, for example. In 2019, the average inflation rate was 1.0 per cent.

Consumer prices were raised most in December by increases in the prices of electricity, cigarettes, rents and petrol from one year ago. The rising of consumer prices from one year back was curbed most by reductions in the prices of average interest rate on housing loans, mobile phones and televisions. From November to December the month-on-month change of consumer prices was 0.1 per cent, which was caused by vegetables being more expensive, for example.

Statistical release