Latvia: Inflation falls to 19-month low
July 9, 2012
In June, consumer prices fell 0.1% over the previous month, which was a notch above the 0.2% drop tallied in May. The monthly reading reflected lower prices for alcoholic beverages and tobacco as well as for transport, amid declining fuel prices. Owing to the monthly drop, annual headline inflation fell from 2.2% in May to 1.9% in June, which represents the lowest level since November 2010. Meanwhile, HICP inflation (based on the harmonized index of consumer prices) declined from 2.8% in April to 2.3% in May (the last month for which data are available). Consequently, annual average HICP inflation dropped from 4.0% in April to 3.7% in May. The Central Bank expects HICP inflation to average 2.4% this year, before falling to 2.0% in 2013.
Author: Ricardo Aceves, Senior Economist