Latvia Inflation


Inflation just inches up in August

Consumer prices dropped 0.6% in August over the previous month, which followed the 0.9% decrease tallied in July and marked a third consecutive drop. The statistical institute stated that lower prices for transport, as well as for food, were the main drivers behind the monthly decline.

After falling from a peak of 1.1% in May—a 30-month high—to a flat reading in July, inflation inched up to 0.1% in August. The reading continues rising fears that the country could enter into a deflationary spiral in the coming months if low energy and food prices persist. Annual average inflation inched down from 0.5% in July to 0.4% in August.

Harmonized consumer prices decreased 1.1% month-on-month in July (June: -0.1% mom), which is the last month for which data are available. Harmonized consumer prices fell 0.2% over the same month last year (June: +0.7% year-on-year). Annual average HICP inflation inched down from 0.6% in June to 0.5% in July.

The Central Bank sees HICP inflation averaging 0.7% in 2015 and 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect HICP inflation to average 0.6% in 2015, which is unchanged from last month’s projection. For 2016, the panel expects inflation to average 1.9%.

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Latvia Inflation Chart

Latvia Inflation August 2015

Note: Month-on-month changes and annual variation of consumer price index (CPI) in %.
Source: Central Statistics Bureau.

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