Latvia Inflation July 2016


Inflation remains flat in August

In August, consumer prices fell 0.6% over the previous month and came in below July’s 0.3% decrease. According to the Central Statistical Bureau, the monthly decline reflected lower prices for food and alcoholic beverages as well as for services related to transport.

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

Moreover, harmonized consumer prices—derived from the Harmonized Index of Consumer Prices (HICP)—decreased 0.7% month-on-month in August, which was down the 0.3% drop in July. HICP consumer prices fell 0.1% annually, which contrasted the 0.1% increase in July. The annual average variation in HICP inflation stabilized at July’s minus 0.3% in August.

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 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%.

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Latvia Inflation Chart

Latvia Inflation August 2016

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

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