Inflation

Updated: 14 Aug 2019
Next update: 13 Sep 2019

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 0.8 per cent in July

The year-on-year change in consumer prices calculated by Statistics Finland was 0.8 per cent in July. In June inflation stood at 1.0 per cent. The decline in inflation was caused by lower prices of hotel rooms, for example.

Consumer prices were raised most in July by increases in the prices of electricity, cigarettes, rents, wireless telephone services and capital repairs on detached houses from one year ago. The rising of consumer prices from one year back was curbed most by reductions in the prices of mobile phones, hotel rooms, detached houses and televisions. From June to July the month-on-month change of consumer prices was -0.3 per cent, which was caused by vegetables and household furniture being cheaper, for example.

Statistical release