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Finland Inflation October 2023

Finland: Harmonized inflation declines to over two-year low in October

Harmonized inflation came in at 2.4% in October, down from September’s 3.0%. October’s reading represented the weakest inflation rate since September 2021 and was below the Euro area average of 2.9%. Looking at the details of the release, the moderation was chiefly driven by falling price pressures for housing and utilities—which registered the first year-on-year decline since December 2020—and softer price increases for transportation. In addition, price pressures for food and non-alcoholic beverages moderated to a 21-month low.

Accordingly, the trend pointed down, with annual average harmonized inflation falling to 5.7% in October (September: 6.2%). Meanwhile, consumer price inflation fell to 4.9% in October, from the previous month’s 5.5%.

Finally, harmonized consumer prices increased 0.23% in October over the previous month, moderating from the 0.59% increase seen in September.

Euro area inflation has been on a downward trend since April, allowing the European Central Bank (ECB) to halt interest rate hikes at its 26 October meeting; the ECB aims to bring inflation down to the 2.0% target by 2025. Accordingly, our Consensus forecasts the ongoing downward trend to carry over into 2024, and harmonized inflation should average around the ECB’s target next year.

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