Latvia: Annual decrease in consumer prices deepens in April
May 10, 2016
In April, consumer prices rose 0.4% over the previous month, which came in below the 0.7% increase observed in the previous month. According to the statistical office, the monthly increase stemmed mainly from higher prices for food as well as for clothing and footwear, which were offset by lower housing and communications prices.
On an annual basis, consumer prices fell 0.8% in April, which came in below the 0.6% decline registered in March. April’s print marked a fourth consecutive drop and the lowest level since June 2010. Due to April’s sharp 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 swung from 0.1% in March to minus 0.1% in April.
Moreover, harmonized consumer prices—derived from the Harmonized Index of Consumer Prices (HICP)—increased 0.4% month-on-month in April, 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