Latvia: Inflation eases to 4-month low
August 8, 2011
In July, consumer prices fell 0.3% over the previous month, which reversed the 0.3% increase tallied in June. The reading represented the first decline in consumer prices since August 2010 and reflected lower prices for food and non-alcoholic beverages (-0.9% month-on-month), as well as for clothing and footwear (-6.3% mom). As a result of the monthly fall, annual headline inflation edged down from 4.8% in June to 4.3% in July, which represented the lowest level since March. Meanwhile, HICP inflation (based on the harmonized index of consumer prices) fell from 4.7% in June to 4.2% in July, which drove annual average HICP inflation to 2.9%. In its July macroeconomic development report, the Central Bank expects HICP inflation to average 4.7% this year, which was revised from its previous 2.7% estimate.
Author: Ricardo Aceves, Senior Economist