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Finland's inflation hits 30-yr high in May

Christian Fernsby |
The inflation rate in Finland accelerated to its highest level in three decades, reaching 7.0 percent in May from April's 5.7 percent, according to figures published by Statistics Finland.

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The increase was caused by higher prices of electricity, petrol, and diesel, as well as a sharp rise in the cost of renovating detached houses, said the statistical agency.

The highest inflation was found in transport, in which prices rose by 14.45 percent on an annual basis, followed by prices of food and non-alcoholic beverages, hitting 9.4 percent from one year earlier.

Finland Chamber of Commerce's chief economist Jukka Appelqvist said on Twitter that the last time Finland's monthly inflation rate was over 7.0 percent was in February 1990.

"Unfortunately, the acceleration in inflation does not seem likely to come to a halt," said Appelqvist, explicating that companies are currently facing significant cost pressures that will be passed on to customers in the coming months.

Juho Keskinen, an economist at Finland's credit institution Hypo, wrote on the institution's website that the current rise in prices is unprecedented for many people.

"The level of earnings is not keeping pace now, and purchasing power is declining. When house prices rise by three percent, it actually means they are falling in price, as the general price level rises more than twice as fast," Keskinen commented.

Statistics Finland's preliminary data showed that the inflation rate in the euro area increased to 8.1 percent in May from 7.4 percent in April.

The Finnish Ministry of Finance on Tuesday raised the base rate to 0.00 percent from July 1 until the end of December 2022 to curb inflation. The base rate has been at -0.50 percent since Jan. 1, 2022.


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