Food prices rose by 16.1 percent in November-December. The steepest annual increase in food prices was observed almost six decades ago, in 1964, when food prices rose by an average of 12 percent.
In February, the prices of sugar, flour, butter and eggs rose by more than 30 percent from the previous year. The coffee price increase that hit the news headlines last year has subsided significantly from last year’s peak of more than 50 percent, currently around seven percent. The annual change in the prices of fresh fish has slowed down from last year’s almost 50 percent to around 17 percent.
Statistics Finland emphasized that prices did not fall in any food product group.
On average, Finns spend 27 percent of their spending on housing, 13 percent on food and 12 percent on transportation. Housing costs rose nearly 12 percent last month from a year ago, thanks to a 173 percent increase in mortgage interest rates. Transportation costs, on the other hand, rose by about three percent from the previous year.
Overall, the annual change in consumer prices was 8.8 percent in February, an increase of 0.4 percentage points from January.
YLE pointed out that the purchasing power of households weakened especially last year, when wages struggled to keep pace with rampant inflation. Real incomes are expected to recover at least moderately this year, as wages and pensions are expected to decline and the rise in consumer prices is expected to slow down.
“It is possible that the decline in purchasing power will end, but whether wage increases will be enough to compensate for the bump in real incomes is a good question,” Ilkka KiemaThe director of forecasting from the Research Institute of Labor Research commented to YLE.
Households’ daily finances are affected on the one hand by how much inflation slows down later this year and on the other hand by how much wages rise.
There is still a labor shortage in Finland, Kiema reminded. This typically means that wage increases exceed those agreed in collective bargaining and that people work more overtime, in which case overtime bonuses increase purchasing power.
Aleksi Teivainen – HT
Source: The Nordic Page