A person holding glasses over coins and banknotes on a table in Espoo on 5 August 2022. Consumer prices in Finland rose by 7.8 per cent year-on-year in July, according to Statistics Finland. (Heikki Saukkomaa – Lehtikuva)

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CONSUMER PRICES in Finland surged at a year-on-year clip of 7.8 per cent for the second consecutive month in July, indicates the latest consumer price index of Statistics Finland.

Jukka Appelqvist, the chief economist at Finland Chamber of Commerce, described the increase in prices as “absolutely exceptional” in recent history, highlighting that monthly consumer prices have crept up at an average pace of 1.6 per cent in the 2000s.

“The expectation was that the substantial decline in petrol prices would at least somewhat mitigate the average inflation rate in July. That was not the case as increases especially in electricity and food prices tilted the scales in the other direction,” he analysed in a press release on Monday. “The broad-based upward pressure on prices has not disappeared even though monthly changes in petrol prices are creating swings in both directions.”

Inflation in Finland has not been as high since April 1984, when consumer prices were 8.0 per cent higher than April 1983.

Statistics Finland on Monday revealed that electricity, petrol, diesel and detached-house repairs were the main drivers of inflation in July. Diesel prices were 49 per cent, electricity prices 40 per cent, petrol prices 36 per cent and food prices 12 per cent higher than one year earlier. Among the factors that kept inflation in check were daycare fees, non-refundable prescription drugs, ferry services, and audio and video recordings.

Inflation spreading from fuels to food and electricity makes it increasingly harder for consumers to avoid the effects of inflation, noted Appelqvist.

“The increase in consumer prices was earlier focused largely on fuels, and it may have been possible to attenuate the situation by reducing car use. Today even that is not enough,” he commented.

The month-on-month change in consumer prices was 0.3 per cent, which was attributable to increases in the prices of electricity, the average interest rate on housing loans and mature cheese products. Petrol and diesel prices contrastively slowed down the month-on-month increase, according to Statistics Finland.

Eurostat’s preliminary data indicates that inflation in the eurozone accelerated by 0.3 percentage points from June to 8.9 per cent in July. Prices in Finland, the data suggests, were 8.0 per cent higher than one year earlier.

The estimate is based on preliminary data from member states and the development of energy prices. The statistical office will published detailed data on its harmonised indices of consumer prices for July on Thursday, 18 August.

Aleksi Teivainen – HT

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