Consumer price index

The Consumer Price Index describes development in the prices of products and services purchased by households in Finland. The Consumer Price Index is used as a general measure of inflation. The Consumer Price Index is calculated with a method in which the prices of different commodities are weighed together with their shares of consumption. The calculation of the index follows Laspeyres’ price index formula whereby the shares of consumption used as the weights relate to the base period. Consumer price indices that are reviewed at intervals of a fixed number of years are suitable for short-term examinations. From the user’s point of view, the Cost-of-living Index is the most practical, because index revisions do not interrupt the series. The Cost-of-living Index 1951:10=100 is a long time series calculated by chaining from the latest Consumer Price Index 2015=100, for which reason its development follows the Consumer Price Index. The point figures are published monthly at the same time as the Consumer Price Index. The index adjustment of rental agreements on dwellings, business premises and land can be tied to the Cost-of-living Index. In addition to their national Consumer Price Index, the Member States of the European Union also produce a Harmonised Index of Consumer Prices. Its main purpose is to enable comparisons of inflation between the EU Member States. The European Central Bank uses the Harmonised Index of Consumer Prices as the measure of inflation in its monetary policy. Calculation of the Harmonised Index of Consumer Prices is guided by EU Regulations. Eurostat, the Statistical Office of the European Union, calculates the European Index of Consumer Prices and the Monetary Union Index of Consumer Prices by weighting together the Harmonised Indices of Consumer Prices calculated by the Member States. The Finnish Harmonised Index of Consumer Prices is mainly based on the same price data and national accounts data as the Finnish national Consumer Price Index. The development of the Harmonised Index of Consumer Prices deviates slightly from that of the national consumer price indices, because it includes fewer commodities. In the Harmonised Index of Consumer Price, the concept of consumption excludes owner-occupancy, games of chance, interests and tax-like payments. Its coverage of the national Consumer Price Index is therefore slightly less than 85 per cent.