Consumer price index, 15 July 2002

The CPI stood at 109.9 (1998=100) in July in comparison with 108.2 in July last year, a year-to-year change of 1.6 per cent. The year-to-year change in June was 0.4 per cent. Due to the 2001 VAT reform and lower taxes on petrol the CPI made a sharp drop in July last year. These effects of the tax changes are now in July eliminated. The tax changes contributed to a decline in the CPI of 1.2 per cent, the same as the year-to-year change in July. The CPI adjusted for tax changes and excluding energy products (CPI-ATE) was 2.7 per cent in July, the same as in June.

The consumer prices down by 0.2 per cent from June to July

The prices of clothing and footwear experienced a considerable drop in July due to a high degree of seasonal sales. The prices of clothing fell by 6.3 percent while the prices of footwear went down 4.0 per cent. The prices of household textiles decreased in July as well, also as a result of sales activities.

After a rise in June the prices of accommodation services went down considerably in July, mainly because of summer-promotion activity.

Costs for owner-occupied housing and rentals for housing increased both by 0.4 per cent in July. The tariffs on electricity continued to fall in July by 1.0 per cent.

The prices of food and non-alcoholic beverages rose by 1.1 per cent, mostly because of the agriculture agreement. It was mainly the prices of diary- and meat products that contributed to the increase. On the other hand prices of fruits and vegetables went down.

Year-to-year change: Prices up 1.6 per cent

Rentals have been the main contributing factor to the CPI growth. Costs for owner-occupied housing and rentals for housing have increased by 6.0 and 5.2 per cent respectively. Due to the elimination of the VAT effect the prices of food and non-alcoholic beverages have also contributed to the overall growth in July with an increase of 3.1 per cent. Also higher prices in the service sector have been registered.

Unlike 2001, the tariffs on electricity have this year shown more regular seasonal movements and are in July 14.5 per cent lower than in July last year. The CPI excluding energy products (CPI-AE) and the CPI excluding electricity have increased by 2.4 and 2.1 per cent respectively since July last year. The price developments of clothing also contributed to dampen the price increase.

The CPI adjusted for tax changes (CPI-AT) was 2.0 per cent in July. Lower taxes reduced the consumer price growth by 0.4 percentage points. CPI-ATE was 2.7 per cent.

Change in the year-to-year growth: Sharp increase

The year-to-year growth in the CPI went from 0.4 per cent in June to 1.6 per cent in July. In addition to the development in the food prices, the prices of petrol have contributed to the sharp increase in the year-to-year growth. The petrol prices fell by 8.0 per cent in July last year mainly due to lower taxes while the prices in July this year only fell marginally.