An advertisement for home-grown carrots in the fresh produce section of an S-market in Helsinki on 15 March 2023. In Finland, consumer prices rose by 3.3 per cent year-on-year in November, signalling a significant slowdown from the previous month, reveal data published by Statistics Finland. (Antti Hämäläinen – Lehtikuva)
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INFLATION continued to slow down rapidly in Finland in November.
Statistics Finland on Thursday reported that consumer prices crept up by no more than 3.3 per cent from the previous month, representing a drop of 1.3 percentage points from the year-on-year rise recorded in October.
Inflation, it revealed, was slowed down especially by drops in the prices of diesel, electricity and dwellings in housing companies. Electricity prices alone had a disinflationary effect of 1.2 points in November.
“Behind the slower rate of inflation are decreases in electricity, house and petrol prices, the weak economic outlook, and the benchmark rate hikes initiated last year by the European Central Bank (ECB),” Roope Ohlsbom, an economist at Suomen Yrittäjät, summarised according to Helsingin Sanomat.
The main drivers of consumer prices, by contrast, were the mean interest rate on housing loans, the interest rate on consumer credits and the price of district heating, according to Statistics Finland.
Compared to October, consumer prices in the country decreased by 0.3 per cent as a consequence of factors such as the lower cost of air travel and package tours.
The Harmonised Index of Consumer Prices, meanwhile, put the annual rate of inflation in the eurozone at 2.4 per cent, representing a half-a-point drop from October. In Finland, the preliminary data show a year-on-year increase of 0.7 per cent in consumer prices in November.
The harmonised index does not take into account the interest rates on housing loans, making it a more reliable gauge in times of rapid changes in interest rates.
Ohlsbom on Thursday estimated that the rapid slowing down of inflation is good news for both businesses and consumers.
“Consumer demand is boosted as the purchasing power of households supports companies in the service sector, for example. If the increase in prices continues to slow down, you could even talk about the threat of market-freezing negative inflation, or deflation, in Finland,” he analysed in his comment.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
