Latvia: Annual decline in consumer prices stabilizes in May
June 8, 2016
In May, consumer prices rose 0.6% over the previous month, which came in above the 0.4% increase observed in the previous month. According to the statistical office, the monthly increase stemmed mainly from higher prices for food and non-alcoholic beverages as well as for transportation and clothing and footwear.
On an annual basis, consumer prices fell 0.8% in May, which mirrored the reading registered in April. May’s print marked a fifth consecutive annual drop and represents the lowest level since June 2010. Due to May’s fall, the trend suggests that a return of inflation to positive territory is not in the cards in the coming months. The annual average variation in inflation fell from minus 0.1% in April to minus 0.2% in May.
Moreover, harmonized consumer prices—derived from the Harmonized Index of Consumer Prices (HICP)—increased 0.4% month-on-month in April (the last month for which data are available), which came in below the 0.8% rise observed in March. HICP consumer prices fell 0.7% annually in April, which followed a 0.6% fall in March. Annual average HICP inflation was zero in April (March: +0.1%).
Author: Ricardo Aceves, Senior Economist