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Published: 14 July 2009

Inflation -0.1 per cent in June

The year-on-year change in consumer prices, i.e. inflation, calculated by Statistics Finland fell to -0.1 per cent in June. In May it stood at 0.0 per cent. The fall in consumer prices was mostly due to reductions in interest rates and liquid fuel prices from the year before. The last time inflation was negative was in spring 2004 when alcohol tax was lowered.

In June, consumer prices were brought down most from the year before by lower interest rates and fallen priced of liquid fuels, but also by lower prices of dwellings in housing companies and real estate as well as cheaper prices of used passenger cars and telephone call charges. By contrast, consumer prices were pushed up most by risen prices of food, alcoholic beverages and tobacco, increases in rents, and risen prices of restaurant and café services and health services.

From May to June consumer prices rose by 0.2 per cent. This was mostly due to increases in the prices of liquid fuels from the month before.

Each mid-month, Statistics Finland interviewers collect around 50,000 prices on 497 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.

Finland's inflation indicators, June 2009

	Point figure	Year-on-year change	Month-on-month change
Consumer Price Index 2005=100	108.7	-0.1%	0.2%
Cost-of-living Index 1951:10=100	1 735
Harmonised Index of Consumer Prices 2005=100	109.2	1.6%	0.4%
Harmonised Index of Consumer Price at Constant Taxes 2005=100	108.7	1.4%	0.4%

According to preliminary data, inflation in the EMU countries was -0.1 per cent in June

According to the preliminary data on the Harmonised Index of Consumer Prices, the rate of inflation in the EMU countries was -0.1 per cent in June. In May it stood at 0.0 per cent. The corresponding figure for Finland was 1.6 per cent in June.

The Harmonised Index of Consumer Prices does not include owner-occupancy, games of chance, interests on consumption and other credits or levies such as asset transfer tax and the vehicle tax. The consumption items included in the Harmonised Index of Consumer Prices as well the rules governing its compilation have been defined in EU regulations.

Eurostat's estimate of inflation in the EMU area is based on preliminary data from EMU Member States and on the price development of energy. Eurostat will publish detailed data on Harmonised Indices of Consumer Prices for June on 15 July.

The year-on-year change in the Harmonised Index of Consumer Prices at Constant Taxes 1.4 per cent in June

Statistics Finland started to publish a new Harmonised Index of Consumer Prices at Constant Taxes in June 2009. The publication concerned data for May. The index measures the so-called market inflation. The index with constant taxes is based on the Harmonised Index of Consumer Prices. Eurostat intends to start publishing a corresponding index on the EMU countries in autumn 2009.

The year-on-year change in the Harmonised Index of Consumer Prices was 1.6 per cent and that of the index at constant taxes was 1.4 per cent in June. The month-on-month change of both indices was 0.4 per cent in June. There were no changes in commodity taxes in June.

In the Harmonised Index of Consumer Prices at Constant Taxes the impact of value added tax and other commodity taxes has been eliminated by keeping the taxes constant relative to the index base period. The index measures market inflation or the change in prices caused by reasons other than changes in commodity taxes. The price impact of the tax changes is obtained by comparing the development of the Harmonised Index of Consumer Prices and the Harmonised Index of Consumer Prices at Constant Taxes.

Alcohol tax rose in January 2009. According to the Harmonised Index of Consumer Prices the price of retail alcohol rose by 4.75 per cent and that of restaurant alcohol by 1.31 per cent in the December 2008 to January 2009 period. According to the index at constant prices, the price of retail alcohol rose by 0.24 per cent and that of restaurant alcohol by 0.05 per cent over the same period (market inflation, or change in prices due to reasons other than changes in taxes). The price impact is obtained as the difference of the development of the Harmonised Index of Consumer Prices and the index at constant taxes. The price-increasing impact of the rise in alcohol tax was 4.5 per cent for retail alcohol and 1.3 per cent for restaurant alcohol.

Motorcycle tax went up in April 2009, which pushed the prices of motorcycles up by 3.1 per cent. Alcohol and tobacco taxes rose in January 2009. The rise in tobacco tax caused a price impact of 2 per cent.

The Harmonised Index of Consumer Prices at Constant Taxes is published monthly in connection with the Consumer Price Index.

Source: Consumer Price Index 2009, June. Statistics Finland

Inquiries: Mr Juhani Pekkarinen +358 9 1734 3476, Ms Christina Telasuo +358 9 1734 3472
Harmonised Index of Consumer Prices: Ms Christina Telasuo +358 9 1734 3472
kuluttajahintaindeksi@stat.fi

Director in charge: Mr Kari Molnar

Consumer price index 2009, June (pdf 243.4 kB)

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• Cost-of-living Index 1951:10=100 (14.7.2009)

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Last updated 14.7.2009