Latvia Inflation December 2015

Latvia

Latvia: Inflation in December rises for second consecutive month

January 12, 2016

In December, consumer prices dropped 0.4% over the previous month, which came in below the flat reading observed in the previous month. According to the statistical office, lower prices for clothing and footwear as well as food and non-alcoholic beverages were the categories that exerted downward pressure on overall consumer prices.

Inflation increased from 0.1% in November to 0.4% in December, which marked a six-month high. The reading was also the second positive result after two consecutive months of decreases. Throughout 2015, inflation was subdued. Inflation averaged 0.2% in 2015, which came in below the 0.6% observed in 2014.

Moreover, harmonized consumer prices decreased 0.3% month-on-month in December, following the 0.1% decrease observed in November. Harmonized inflation rose from a flat reading in November to 0.4% in December. HICP inflation averaged 0.2% in the full year 2015, which was down from the 0.7% observed in 2014.

Looking forward, inflation is likely to rise this year. The Central Bank sees HICP inflation averaging 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect HICP inflation to average 1.4% in 2016, which is down 0.3 percentage points from last month’s projection. For 2017, the panel expects inflation to average 2.2%.


Author:, Senior Economist

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Latvia Inflation December 2015

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


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