Wages outpace inflation in Finland as food prices set to rise

Finnish wages have risen by 19% since 2020, outpacing price increases for many goods and services, according to data from public broadcaster Yle.

Housing, footwear, and plant-based milks have become cheaper relative to wages, while cooking oils, chocolate, and fuel have grown more expensive. Airfare costs have also surged recently, though they fell sharply during the pandemic when measured against wages.

The Ministry of Finance forecasts wages will rise 3.6% this year, 1.6 percentage points above inflation. The projection accounts for one-off wage increases but notes uncertainty due to the US strike on Iran and its global economic impact, particularly on energy and fertilizer prices.

Energy prices have since declined as markets anticipate the reopening of Hormuz Strait oil and gas shipments, though not to pre-war levels. Pellervo Economic Research (PTT) director Sari Forsman-Hugg said the crisis has already pushed up agricultural costs, with food prices expected to rise this autumn, albeit less than initially feared.

Domestic policy is also affecting prices, with a new soft drink tax increasing prices by over 8% in April and 7% last month. The tax raises levies to 20 cents per litre for sugar-free drinks and up to 59 cents for sugared beverages.