Inflation climbs to 7% in May as fuel, power prices go up

The year-on-year change in consumer prices was 7.0 per cent in May, according to Statistics Finland.

In April, inflation stood at 5.7 per cent.

Consumer prices were raised most in May by increases in the prices of electricity, petrol, diesel, and capital repair on detached houses from one year ago.

The rising of consumer prices from one year back was curbed most by reductions in the prices of children’s day care, medical examination and treatment fees, non-refundable prescription medicines, regular ferry service and redemption of documents.

The month-on-month change of consumer prices was 1.3 per cent, which was caused by higher prices of petrol compared to previous month.

News agency Xinhua adds: 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.

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.