Inflation at 1.2 per cent in July

No change was recorded in consumer prices between June and July. In the year to July, however, there was a 1.2 per cent rise in prices. This information can be gathered from the Consumer Price Index of Statistics Finland.

Price development in the year

The highest price increase in the year was in housing, up by 3.1 per cent. This was largely attributable to the rise in house prices, which fuelled inflation by nearly 0.6 percentage points. Higher rents and maintenance fees in owner-occupied dwellings, more expensive electricity and light fuel oil as well as increased prices of repairs and district heat also contributed to the price rise in housing. Housing is the biggest commodity group in the consumer price index, the relative importance of which is about 20 per cent. Consequently, these commodities belonging to the housing category of the index boosted inflation by as much as 0.9 percentage points. On the other hand, the fall in the interest rates of housing loans lowered the consumer price level by a good 0.3 percentage points.

Consumer prices were also pushed up by the 1.3 per cent increase in the price of food, due primarily to the rise in the price of coffee. More expensive potatoes, bread and grain products as well as milk and cheese also raised the price of food. Price rises in alcoholic beverages and cigarettes also caused inflation to accelerate.

Inflation was checked most in July by the fall in interest rates. Fruits and vegetables were also slightly cheaper than a year ago.

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Price development over the year, %
Prices that rose most 7/1996-7/1997		Prices that fell most 7/1996-7/1997
Packet of coffee	38.8	Computer games	30.5
Potatoes	37.8	Tomatoes	27.7
Chinese cabbage	28.7	Domestic flights	24.0
Onions	25.8	Head cabbage	21.3
House prices	17.5	Shrimps	18.7

Price development from June to July

There was on average no change in consumer prices in July compared to June. The rise in house prices tended to have the greatest upward pressure on prices in the second quarter of the year. The price of coffee continued to rise in July, and the prices of potatoes, cucumber and carrots were also up.

The increase in prices was curbed most in July by the clearing sales in clothes, which lowered the change on one month by nearly 0.3 percentage points.

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Inflation indicators in Finland
	Point figure	Change on one year	Change on one month
Consumer Price Index (1990=100), July	114.2	1.2%	-0.0%
Cost of Living Index (1951:10=100), July	1 417
Harmonised Consumer Price Index of the EU (1996=100), July	101.2	1.1%	-0.2%
Indicator of underlying inflation (1990=100), June	112.5	0.8%	0.2%

Harmonised consumer price index of the EU

The point figure of the harmonised consumer price index of the EU (1996=100) was 101.2 in July and the year-on-year change 1.1 per cent. From June to July the change was -0.2 per cent.

In June the inflation rate in France and Austria was the lowest in the Member States, at 1.0 per cent, as measured by the harmonised consumer price index. The inflation rate in Finland, at 1.1 per cent, was the third lowest. The average inflation rate in the EU was 1.6 per cent in June.

Source: Consumer Price Index, July 1997. Statistics Finland
Further information: Ms Arja Kinnunen, tel. +358 9 1734 3479, or
Mr Juhani Pekkarinen, tel. +358 9 1734 3476
Harmonised Consumer Price Index of the EU: Mr Jarko Pasanen,
tel. +358 9 1734 3423