Latvia: Consumer prices swing from annual rise in August to a fall in September
October 8, 2015
In September, consumer prices decreased 0.2% over the previous month, which followed the 0.6% drop observed in August. The monthly fall stemmed from lower prices for transport fuels as well as for fresh food, in particular fruits.
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. Consumer prices fell 0.6% annually in September, which contrasted the 0.1% increase observed in August. September’s result, which also marked the lowest reading since July 2010, 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 0.4% in August to 0.3% in September.
Harmonized consumer prices decreased 0.4% month-on-month in August (the last month for which data are available), which was up from the 1.1% decrease observed in July. Harmonized consumer prices rose 0.2% over the same month last year in August, which contrasted the 0.2% fall seen in July. Annual average HICP inflation stabilized at July’s 0.5% in August.
Author: Ricardo Aceves, Senior Economist