Latvia Inflation


Latvia: Consumer prices fall on an annual basis for second consecutive month

November 9, 2015

In October, consumer prices rose 0.4% over the previous month, which contrasted the 0.2% decrease observed in the previous month. The statistical office reported that higher prices for food and non-alcoholic beverages, as well as clothing and footwear, were the main drivers behind the monthly jump.

Inflation began an almost uninterrupted downward trend since May of this year and entered into negative territory in September for the first time since February. In October, consumer prices fell again on an annual basis, but the decline was less pronounced than in the previous month. Consumer prices dropped 0.2% year-on-year in October, which was up from the 0.6% decrease tallied in September. Nonetheless, October’s print continued to raise fears that the country could enter into a deflationary spiral in the coming months if low energy and food prices persist. Annual average inflation fell from 0.3% in September to 0.2% in October, which marked the lowest level in 15 months.

Harmonized consumer prices decreased 0.2% month-on-month in September (the last month for which data are available), which was up from the 0.4% decrease observed in August. Harmonized consumer prices fell 0.4% over the same month last year in September, which contrasted the 0.2% increase seen in August. Annual average HICP inflation fell from 0.5% in August to 0.3% in September.

The Central Bank sees HICP inflation averaging 0.7% in 2015 and 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect HICP inflation to average 0.4% in 2015, which is unchanged from last month’s projection. For 2016, the panel expects inflation to average 1.8%, which is also unchanged from last month’s estimate.

Author:, Senior Economist

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Latvia Inflation Chart

Latvia Inflation October 2015

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

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