|Updated: 14.1.2015 - Next update: 19.2.2015|
Inflation fell to 0.5 per cent in December
The year-on-year change in consumer prices calculated by Statistics Finland was 0.5 per cent in December. In November, it stood at 1.0 per cent. The inflation slowed down particularly because prices of petrol and light fuel oil went down. In 2014, the average inflation rate was 1.0 per cent.
In December, consumer prices were pushed up most from the previous year by risen rents, increases in the retail prices of tobacco products, and price increases in maintenance services of blocks of flats. The rising of consumer prices was curbed most in December by fallen prices of liquid fuels, entertainment electronics and used cars from the year before. From November to December, consumer prices fell by 0.1 per cent, primarily due to decreases in the prices of liquid fuels.
Each mid-month, Statistics Finland's interviewers collect altogether around 50,000 prices on nearly 500 commodities from approximately 2,700 outlets for the Consumer Price Index. In addition, some 1,000 items of price data are gathered by centralised collection. The Consumer Price Index 2010=100 Handbook for Users is available on the CPI-home page (www.stat.fi).Statistical release
Statistics Finland / Consumer price index
Description of indicator
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.
The goal of efforts to combat consumer price inflation is to create the best possible conditions for economic activity. Success in achieving targets depends closely on examining the inflation outlook and on making an as timely a response as possible to any acceleration in inflation. Alongside the traditional inflation indicator, the term structure of interest rates and other economic development indicators should be examined. Real-time data, the reliability brought by exactitude, and the adherence of indicators to future expectations play a key role in the choice of economic indicators.