Inflation at 0.6 per cent in January

Consumer prices rose by 0.6 per cent in the year to January. From December to January the point figure of the consumer price index fell slightly. As of January 1997, Finland started to implement the EU harmonised practice in the treatment of missing prices of the CPI. This lowered both the year-on-year change and the change on one month by 0.1 percentage points, the Consumer Price Index of Statistics Finland indicates.

The year-on-year change of the Consumer Price Index (1990=100), 1990-1997 (%)

Of the main commodity groups, the highest rise over the year occurred in health and medical care, up by 1.8 per cent. Price rises in education and recreation and in beverages and tobacco almost equalled that of health care, whereas the prices of clothing and footwear fell.

Changes in the prices of individual products - substantial as they may be - do not necessarily have much effect on the overall price level. The single most important factor in the increase in the overall price level was the over 12 per cent rise in house prices. The greatest curtailment on the inflation was provided by the fall in interest rates. House prices increased inflation by 0.4 percentage points, while interest rates reduced it by 0.6 percentage points. Fuel prices also tended to push up the point figure of the consumer price index. The prices of second- hand cars in turn had the opposite effect.

From December to January, the prices of clothing and footwear fell by 7.6 per cent due to discount sales. The biggest increase occurred in beverages and tobacco, up by 1.2 per cent. The cold weather in Central and Southern Europe raised the prices of vegetables. The general price level was, however, raised most by the one per cent rise in housing.

table 1

A total of over 40 000 prices are collected for CPI from some 2 000 outlets in the middle of each month. In addition to this, some 600 price data are collected in centralised collection. The cost of living index, the harmonised consumer price index, and the indicator of the underlying inflation are all based on the data collection of the CPI.

table 2
* The Harmonised Consumer Price Index of the EU (1996=100) is published
for the first time now. Comparable data will not however be available until on March 7, 1997.

Source: Consumer Price Index, January 1997
Further information: Arja Kinnunen, +358 9 1734 3479,
or Juhani Pekkarinen, +358 9 1734 3476