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Finland’s Inflation Rate Falls Close to Three-Year Low in June

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July 15 (Bloomberg) -- Finland’s inflation eased to the slowest pace in almost three years in June as its recession weighs on demand, damping price growth.

The inflation rate, which excludes house prices and borrowing costs, slid to an annual 1.4 percent last month from 1.6 percent the month before, Helsinki-based Statistics Finland said on its website today. Consumer prices decreased 0.1 percent in the month, mainly because the prices of vegetables fell, the statistics office said.

Finland’s economy, along with its 16 euro peers, is struggling to emerge from a recession that follows the three-year debt crisis in the region. The contraction in the euro area is the longest since the introduction of the single currency in 1999. It has propelled unemployment to record levels and hurt confidence in the economic outlook.

Finland’s gross domestic product shrank an annual 4.2 percent in April and exports contracted an annual 6 percent in May.

The European Central Bank kept its benchmark rate at a record-low 0.5 percent this month and, for the first time, gave forward-looking policy guidance. The Frankfurt-based bank committed to keep interest rates low for an “extended period,” President Mario Draghi said on July 4.

Finland’s harmonized inflation rate was 2.3 percent in June.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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