Latvia Inflation


Latvia: Inflation jumps to two-year high

May 10, 2011

In April, consumer prices jumped 1.1% over the previous month, which was above the 0.7% increase observed in March. The monthly price spike mainly reflected higher prices for clothing and footwear as well as for food and non-alcoholic beverages. Owing to the monthly jump, annual headline inflation rose from 4.2% in March to 4.5% in April, overshooting market expectations, which had anticipated that inflation would moderate to 4.0%. The March result represented the highest rate of inflation since May 2009. Meanwhile, HICP inflation (based on the harmonized index of consumer prices) rose from 4.1% in March to 4.3% in April. The increase drove annual average HICP inflation to 1.3%, which represented the second consecutive positive reading, following ten straight months with annual average inflation mired in negative territory. In its April macroeconomic development report, the Central Bank expects HICP inflation to average 2.7% this year.

Author:, Senior Economist

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