Inflation in Finland reaches 7-year high at 3.8%

February 14, 2008

Inflation in Finland hit a 7-year-high in January, reaching 3.8%, it has emerged.

Statistics Finland announced today that the high figure had been reached, compared to 2.6% in December or 2.3% in January 2007. This surpasses all figures since November 2000, when the number reached 4%. It is also a rare occasion where Finnish inflation has surpassed the average for nations which use the Euro, currently at 3.2%.

The agency said that economic policy was responsible, with researcher Juhani Pekkarinen saying "About a sixth of the (year-on-year) increase was caused by taxes," and going on to add that the low prices of vehicles and electronics had prevented inflation from rising further. Statistics Finland added that contributing factors included increases in food, alcohol and liquid fuel prices, higher interest rates and an increase to costs in restaurants and cafés.

Erkki Liikanen, governor at the Bank of Finland, also commented on the new figures. "It is a high figure and shows how important it is to strive for price stability... One of the basic functions of the central bank is secure price stability ... which, in turn, is necessary for improving growth and employment."

He went on to say the bank would monitor the situation across Europe, saying "We will be evaluating the risks facing economies from the angle of price stability and growth, and then when we next meet in March we'll see (if a response is required)."