Consumer price index, 15 January 2007

The CPI was 117.0 (1998=100) per January 2007, compared to 115.6 in the same period last year. This is equivalent to a year-to-year growth of 1.2 per cent, down from 2.2 per cent in December 2006. The year-to-year growth in the CPI-ATE was 1.0 per cent in January 2007, unchanged from December 2006.

Clothing and footwear prices pulled CPI down from December to January

The 1.3 per cent fall in the CPI from December 2006 to January 2007 was mainly due to the price development in clothing and footwear together with electricity. Sales activities in clothing and footwear gave an overall price fall of 11.2 per cent, with clothing prices falling more than footwear prices. Prices of furniture and household textiles fell by 4.0 and 2.9 per cent respectively, also due to sales activities.

The 14.8 per cent fall in electricity prices also contributed to the decrease in the CPI from December to January. There was a significant fall in prices of electricity while the cost of electricity transport had a marginal increase.

Housing rentals was the most significant single factor that cushioned the CPI fall, with an increase of 0.6 per cent. Prices in a number of services connected to recreation and culture, social services together with transport and dental services also contributed to offset the CPI fall. Increased kindergarten fees and day care services in elementary schools resulted in a price increase in social services of 2.3 per cent. See kindergarten article Households’ payments in kindergartens. Rates of change, January 2007 .

As of 1 January 2007, VAT for food and non-alcoholic beverages increased from 13 to 14 per cent, and most of the special taxes were adjusted by around 1.8 per cent. In addition, a revision of the tax system for cars resulted in a slight increase in car prices. Without the tax changes, car prices would have fallen by 0.8 per cent. Overall, changes in taxes contributed to pulling the CPI up by 0.2 percentage points.

CPI growth at 1.2 per cent in the last 12 months

The CPI increased by 1.2 per cent from January 2006 to January 2007. Housing rentals was the most significant explanatory factor behind the price growth. Actual and imputed rentals for housing increased by 2.3 and 1.9 per cent respectively. Prices of products and services connected to maintenance and repair of dwellings also contributed to push the CPI up, with a 3.1 per cent increase. Prices of services increased more than product prices.

With a price increase of 7.5 per cent, services connected to recreation and culture contributed to pulling the CPI up in the last 12 months. The increase in prices of services connected to transport, hotel and dental services also had an upward effect on the CPI growth.

Prices of food and non-alcoholic beverages together increased by 1.8 per cent from January 2006 to January 2007. It was mostly fresh vegetables and fruits that showed strong price increases.

Electricity prices dominated the year-to-year growth in the CPI in 2006, which also contributed to the growth in the CPI from January 2006 to January 2007, but to a smaller extent. Prices of electricity were 3.9 per cent higher in January 2007, compared to the same period last year.

The 8.1 per cent fall in clothing prices contributed to dampen the CPI growth in the last 12 months. This was the lowest year-to-year change since August 2004. Prices of telephone services and audiovisual equipments also pulled in the same direction, with a price fall of 7.9 and 6.4 per cent respectively.

Energy products pulled down the year-to-year growth in CPI

The year-to-year growth in the CPI decreased from 2.2 per cent in December 2006 to 1.2 per cent in January 2007. The decrease can be explained by the price development in energy products. Electricity prices showed a strong price fall from December 2006 to January 2007, compared with a marginal increase at the same time last year. Fuel prices fell slightly from December 2006 to January 2007, with an increase in the same period the year before.

Prices in clothing and footwear contributed also in the direction of a lower year-to-year growth in CPI due to stronger sales activities from December 2006 to January 2007 compared to the same period the year before.

In the opposite direction, social services had a price increase from December 2006 to January 2007 compared to a strong fall at the same time last year.

The year-to-year growth in the CPI-ATE was 1.0 per cent in January 2007 and remained unchanged from December 2006. The year-to-year growth in Consumer price index adjusted for tax changes (CPI-AT) fell from 1.8 per cent in December 2006 to 1.1 per cent in January 2007.