Latvia: Inflation jumps to highest level in more than two years
June 8, 2011
In May, consumer prices added 0.4% over the previous month, which was well below the 1.1% increase tallied in April. The monthly rise mainly reflected higher prices for food and non-alcoholic beverages, which were partially offset by lower prices for health and transport. Despite the subdued reading, annual headline inflation rose from 4.5% in April to 5.0% in May, which represented the highest level since April 2009 but, nevertheless, undershot market expectations of a 5.2% rise. HICP inflation (based on the harmonized index of consumer prices) followed suit and rose from 4.3% in April to 4.8% in May. The increase drove annual average HICP inflation to 1.9%. In its April macroeconomic development report, the Central Bank expects HICP inflation to average 2.7% this year.
Author: Ricardo Aceves, Senior Economist