Latvia: Consumer prices fall in August over same month last year
September 9, 2013
In August, consumer prices plunged 0.8% over the previous month (July: -0.3% month-on-month), which marks the sharpest monthly decrease in four years. According to the statistical office, the monthly fall mainly reflects lower prices for food as well as for communications.
As a result of the monthly reading, consumer prices fell 0.2% in August over the same month last year, (July: +0.4% year-on-year), the first negative result after two consecutive months of rising prices. Meanwhile, HICP inflation (based on the harmonized index of consumer prices) rose from 0.2% in June to 0.5% in July, the most recent month for which data are available. Annual average HICP inflation dropped to 0.8% in July (June: 0.9% yoy).
The Central Bank expects HICP inflation to average 0.7% in 2013 (previous estimate 2.0%). FocusEconomics Consensus Forecast panelists expect HICP inflation to average 0.9% this year, which is down 0.3 percentage points from last month's projection. For 2014, the panel expects HICP inflation to average 2.5%.
Author: Ricardo Aceves, Senior Economist