Price hikes on food spur inflation
Goods and services an average 3.8 per cent more expensive in January than a year earlier
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The annual inflation rate surged in January to 3.8 per cent. In December the rate of annual inflation was stood at just 2.6 per cent.
Exceptionally, the Finnish inflation rate exceeded the average for the euro zone. Inflation was spurred especially by the rising cost of food and fuels. Restaurant and café prices and alcoholic beverages also went up at the beginning of the year.
Also propelling inflation were rising interest rates, as well as tax hikes that came into effect in January. The higher prices of alcohol, fuel, and electricity were largely attributable to tax increases in those commodities.
The surge in food prices stems from the agreement between the food processing industry and the retail trade on passing price pressure, which were caused primarily by rising prices of raw materials, onto retail prices.
Grain prices have risen especially high in recent times, which affects the prices of both grain products, as well as milk and meat.
The food industry negotiates its prices with the retail trade three times a year. The next round of price hikes are expected in May.
The best way for households to save on food costs is to make as much food as possible from scratch, while avoiding processed foods.
Milla Härkönen of the Martha Organisation, which seeks to educate households on matters of home economics, looks at a shop display in a grocery store in the centre of Helsinki.
She notes that a ready-made Pasta Bolognese in a foil container costs EUR 8.65 a kilo. On a nearby shelf, the cheapest pasta goes for about one euro a kilo, while a finer Italian import sells for less than three euros a kilo.
"Ground meat is still fairly cheap, and while the pasta boils, the sauce can be prepared", she notes; buying ready prepared food does not even save much time.
Helsingin Sanomat
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| 15.2.2008 - TODAY |
 Price hikes on food spur inflation |
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