Inflation is 2.1 per cent in April

Inflation is 2.1 per cent in April

According to data released by Statistics Finland on Friday, consumer prices rose by 2.1 per cent in April compared with April 2020.

Inflation rose from 1.3 per cent in March.

The decline in inflation in April was largely due to the sharp fall in fuel prices that took place in the spring of 2020 following the onset of the coronavirus pandemic.

Other factors that increased the inflation rate were the increase in the price of long-distance train tickets and cigarettes, Statistics Finland said.

These were offset by lower prices for ferry tickets, beer served in restaurants and televisions, all of which fell compared to last year. The average interest rates of mortgage lenders and consumer credit providers also decreased year by year.

In Finland, consumer prices rose by 0.4 per cent from March to April this year, partly due to higher prices for medicines.

1.6% in the euro area

The increase in April is the largest annual change in consumer prices since 2015, which is the statistical reference year for the Finnish consumer price index. The next largest increase occurred in October 2018, when prices rose 1.5 percent.

According to preliminary data from Eurostat, the EU’s statistical office, average inflation in the euro area was 1.6% in April.

"Core inflation excluding energy and food prices rose markedly in Finland in April more than the euro area average," said Janne Huovari from Pellervo Economic Research.

"Euro area prices were weighed down in many countries by the worsening disease situation in the spring," Huovari wrote on Twitter.

Why are prices rising?

After months of slowdown caused by a pandemic, many economies are reopening. When people are free to spend money, demand increases, which raises prices.

The European Commission announced on Wednesday that the bloc’s economy is expected to grow 4 percent this year and next.

In Finland, the latest figures from the Ministry of Finance forecast growth of 3%.

The main driver of rising prices is the rise in oil prices, which has already returned to pre-pandemic levels. Fuel costs cause inflation because rising fuel prices are reflected in the prices of other products.

Source: The Nordic Page

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