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Published: 14 August 2009

Inflation -0.6 per cent in July

The year-on-year change in consumer prices, i.e. inflation, calculated by Statistics Finland sunk to -0.6 per cent in July. In June it was -0.1 per cent. Consumer prices fell in particular because the rising of food prices slowed down and interest rates fell from the previous year.

In July, consumer prices were brought down most from the year before by reductions in interest rates and liquid fuel prices. Inflation was also lowered by fallen prices of owner-occupied dwellings and real estate, used passenger cars and telephone call charges. By contrast, consumer prices were pushed up most by increases in food prices, rents, restaurant and café prices, prices of health services, retail prices of alcoholic beverages and tobacco.

From June to July consumer prices fell by 0.6 per cent, mainly due to clothing sales. Food prices and interest rates also fell from the previous month.

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, July 2009

	Point figure	Year-on-year change	Month-on-month change
Consumer Price Index 2005=100	108.0	-0.6 %	-0.6 %
Cost-of-living Index 1951:10=100	1 724
Harmonised Index of Consumer Prices 2005=100	108.4	1.2 %	-0.7 %
Harmonised Index of Consumer Price at Constant Taxes 2005=100	108.0	1.0 %	-0.7 %

According to preliminary data, inflation in the EMU countries -0.6 per cent in July

According to the preliminary data on the Harmonised Index of Consumer Prices, the rate of inflation in the EMU countries was -0.6 per cent in July. In June it stood at -0.1 per cent. The corresponding figure for Finland was 1.2 per cent in July.

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 July on 14 August.

The year-on-year change in the Harmonised Index of Consumer Prices at Constant Taxes 1.0 per cent in July

The year-on-year change in the Harmonised Index of Consumer Prices was 1.2 per cent and that of the index at constant taxes was 1.0 per cent in July. From July last year, prices rose by 0.2 per cent due to changes in commodity taxes and by 1.0 per cent for other reasons. The month-on-month change of both indices was -0.7 per cent in July. There were no changes in commodity taxes in July.

Statistics Finland started to publish a Harmonised Index of Consumer Prices at Constant Taxes in June 2009. In the index 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 the so called 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.

The price impacts from the changes in commodity taxation that took effect in 2009 were as follows: Motorcycle tax went up in April, which pushed the prices of motorcycles up by 3.1 per cent. Tobacco tax rose in January. The rise in tobacco tax caused a price impact of 2 per cent.

In addition, 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.

Source: Consumer Price Index 2009, July. 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
khi.tilastokeskus@stat.fi

Director in charge: Mr Kari Molnar

Kuluttajahintaindeksi 2009, heinäkuu (pdf 245.4 kB)

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• Cost-of-living Index 1951:10=100 (14.8.2009)

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Last updated 14.8.2009