Inflation in Finland hits 40-year high

The jump in consumer prices was reportedly driven by soaring electricity costs and rising mortgage rates

Annual inflation in Finland accelerated to 9.1% in November, according to official data released on Wednesday. The figure represents the highest level of price growth since a 9.2% reading registered in 1983, the country’s statistics agency said in its report.

Consumer prices in the country rose by 1.2% from the previous month, which, according to the agency, was mostly due to higher power prices and an increase in the average mortgage rate. Electricity costs surged 18% month-on-month and were up 66% from last year. Meanwhile, the average interest rate on mortgages rose by a staggering 96%, practically doubling from 2021.

The rise in the price of diesel and higher interest rates on consumer loans also contributed to inflation. Food and non-alcoholic beverages rose by about 16% on average compared to last November.

Jukka Appelqvist , Chief Economist of Finland’s Central Chamber of Commerce, said the published figures are worrying.

“Drastic readings. In Finland, inflation did not decline in November, as it did on average in the euro area, but accelerated to 9.1% percent. There was a rapid increase in prices of 1.2%, which was driven by the rising costs of electricity and interest rates. Neither factor is slowing down quickly,” Appelqvist wrote on Twitter.

READ MORE: EU country’s economy shrinking

Earlier this month, Statistics Finland reported that the country’s GDP shrank 0.3% in the third quarter, ending five consecutive quarters of growth. Economists expect the contraction to continue in the fourth quarter, which would technically mean a recession for the Finnish economy. Analysts anticipate the downturn lasting well into 2023.

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