Latvia: Inflation moderates in June after reaching two-year high
July 8, 2011
In June, consumer prices rose 0.3% over the previous month, which was below the 0.4% increase observed in May. The monthly rise reflected higher prices for alcoholic beverages, as well as for furnishing and household equipment, which were partially offset by declining prices for food. A year-on-year comparison shows that consumer prices edged down to 4.8% in June from 5.0% the previous month, which had marked the highest inflation rate in two years. The reading also fell short of market expectations that inflation would remain steady at 5.0%. That said, HICP inflation (based on the harmonized index of consumer prices) edged down from 4.8% in May to 4.7% in June. The increase drove annual average HICP inflation to 2.4%. In its April macroeconomic development report, the Central Bank expects HICP inflation to average 2.7% this year.
Author: Ricardo Aceves, Senior Economist