Latvia: Inflation falls into negative territory for the first time in almost three years
May 10, 2013
Consumer prices were unchanged in April over the preceding month, which came in well below the 0.5% rise seen in March. According to the statistical office, lower prices for transport as well as for recreation and culture offset an increase in prices for clothing and footwear as well as for alcoholic beverages and tobacco.
Owing to the flat monthly reading, inflation entered into negative territory for the first time in almost three years, with consumer prices falling 0.4% over the same month last year, which contrasts the 0.3% increase seen in March. Meanwhile, HICP annual inflation (based on the harmonized index of consumer prices) edged down from 0.4% in February to 0.3% in March, the latest month for which data are available. As a result, annual average HICP inflation dropped to 1.6% (February: 1.8% yea-on-year).
The Central Bank expects HICP inflation to average 2.0% in 2013. FocusEconomics Consensus Forecast panellists expect HICP inflation to average 1.8% this year, which is unchanged from last month's projection. For 2014, the panel expects HICP inflation to average 2.8%.
Author: Ricardo Aceves, Senior Economist