Inflation rate in Finland rises, but is still slower than elsewhere

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Inflation, in the shape of the year-on-year rate with which consumer prices rise, accelerated to 1.7 per cent in May, Statistics Finland reported on Thursday. This means that, on average, consumer goods and services in Finland are now just under two per cent more expensive than a year ago.
      For April the corresponding figure was 1.3 per cent.
     
But even though inflation went up by 0.4 %-points between April and May, its growth rate in Finland is still slower than in the advanced economic areas in general.
      In the euro-area the year-on-year inflation rate for May was 2.5 per cent. According to the Organisation for Economic Co-operation and Development (OECD), the corresponding figure for developed industrialised countries in the month of April was 2.7 per cent.
      Inflation is now a cause for worry across the developed world. Just over a week ago, the United States Federal Reserve Chairman Ben S. Bernanke noted that the latest inflation figures in the United States have been worse than expected.
      In the United States, inflation has averaged at 3.8 per cent for the last three months, the U.S. Department of Labor reported on Wednesday.
     
Last week, the European central bank (ECB) specialists reckoned that inflation in the euro-area would settle at around 2.1 to 2.5 per cent this year.
      "All in all, the yearly inflation rate is expected to stay high in 2006 and 2007", the ECB President Jean-Claude Trichet pointed out last week.
      Both the U.S. Federal Reserve and the ECB have steadily reaised their key lending rates this year. The rate rise controls taking out loans and economic growth, which in turn slows down inflation. With this measure, most economic organisations and economists expect inflation to stay within acceptable limits.
      "Quite possibly the inflation rate in Finland will also speed up slightly. But the latest surveys do not contain any surprises", affirms economist Lauri Uotila from the Sampo Bank. "There is no need to worry. Inflation in Finland will not reach problem levels".


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  Statistics Finland: Inflation accelerated to 1.7 per cent in May

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