Finland: Inflation reaches two-year high
February 18, 2011
In January, consumer prices increased 0.4% over the previous month, which came in a notch below December's 0.5% price rise. The reading was mostly driven by higher prices for food and non-alcoholic beverages (+1.1% month-on-month). According to Statistics Finland, the increase was mainly the result of a new tax on sweets and soft drinks. Similarly, utilities prices also rose markedly, as the tax on electricity was increased. Owing to the relatively strong price rise, annual inflation inched up to 3.0%. Annual HICP inflation (based on the harmonised index of consumer prices) followed suit, rising from 2.9% in December to 3.1% in January, pushing annual average HICP inflation up a notch to 1.8%. In its most recent Economic Outlook Bulletin published in October, the Central Bank projects HICP inflation to average 1.6% this year and to accelerate further to average 1.9% next year.