Costs related to communications and health have seen the largest increases in Finland this year according to the national statistics bureau. Following concerns from economists about the possibility of deflation in recent weeks, new figures released on Tuesday show a modest rise in consumer prices in August.
Published: 2/09/25 | 21:49
Based on the EU’s harmonised index of consumer prices, Finland’s annual inflation rate increased to 2.2 percent last month up slightly from 2 percent in July according to Statistics Finland.
Over the year, the biggest price hikes occurred in communications and health both rising around 6.7 percent. On a monthly scale clothing and footwear prices saw the highest increase in August climbing nearly 1.5 percent as families prepared for the back-to-school season. Meanwhile, prices for restaurants and hotels rose by almost one percent.
Conversely transport costs fell by roughly 1.5 percent compared to July.
The harmonised index of consumer prices is used to track inflation trends across the eurozone. Unlike Statistics Finland’s own consumer price index it excludes certain items such as costs of owner-occupied housing and loan interest.
Earlier this week the central statistics office reported that wage and salary growth exceeded inflation during the second quarter of this year.
From April to June nominal earnings rose 2.8 percent compared to the same period in 2024. As a result, real earnings, meaning actual spending power increased by 2.3 percent since wages grew faster than consumer prices.
In an article for the investment news site SalkunRakentaja, LähiTapiola economist Hannu Nummiaro highlighted that although average incomes have increased due to wage hikes spending power remains below levels from a few years ago.
Nummiaro estimates that a middle-income worker earning around 3,700 euros per month can currently afford roughly 120 euros less per month in goods and services than in the second quarter of 2021 when purchasing power peaked.
He adds that inflation has reduced the standard of living of such employees by approximately 8,300 euros since spring 2021 that is the portion of earnings lost to rising prices over recent years.
Nummiaro expects it will take a few more years to close this gap in purchasing power.
“Assuming no new inflation shocks, real earnings for wage earners should reach record levels by spring 2027. While it took seven years to recover from the oil crisis in the 1970s, we may manage it in six years this time,” he predicts.
