Latvia Inflation July 2016


Inflation kicks in for the first time in July

In July, consumer prices fell 0.3% over the previous month and came in below June’s flat reading. According to the Central Statistical Bureau, the subdued print reflected that a decline in prices for goods—particularly clothing, food and alcohol— more than offset an increase in prices for services, mainly in telecommunication services.

Inflation inched up from a flat reading in June to 0.1% in July, which marked the first positive reading since December 2015. The annual average variation in consumer prices remained steady at June’s minus 0.3% rate in July.

Moreover, harmonized consumer prices—derived from the Harmonized Index of Consumer Prices (HICP)—decreased 0.3% month-on-month in July, which contrasted the 0.1% rise observed in June. HICP inflation was 0.1% in July (June: -0.6% year-on-year). The annual average variation in HICP stabilized at June’s minus 0.3% in July.

The Central Bank expects HICP consumer prices to fall, on average, 0.4% this year. Due to a recovery in commodities prices, the Bank predicts that inflation will return and increase to 1.3%. FocusEconomics Consensus Forecast panelists expect HICP inflation to average 0.2% in 2016, which is unchanged from last month’s projection. For 2017, the panel expects inflation to average 1.9%.

Author:, Economist

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Latvia Inflation Chart

Latvia Inflation July 2016 0

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

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