Latvia: Inflation rises to highest level in almost two years
March 8, 2011
In February, consumer prices added 0.3% over the previous month, which was well below the 1.3% price increase observed in January. The reading reflected higher prices for food and beverages, which was offset by lower prices for clothing and footwear, due to discounts in seasonal sales. As a result of the monthly increase, annual headline inflation rose from 3.7% in January to 4.0% in February, which represented the highest rate since May 2009. Meanwhile, HICP inflation (based on the harmonized index of consumer prices) rose from 2.4% in December to 3.5% in January, driving annual average HICP inflation to minus 0.7% (the last month for which data are available). In its January macroeconomic development report, the Central Bank expects HICP inflation to average 2.4% this year.
Author: Ricardo Aceves, Senior Economist