Latvia: Inflation sits in negative territory for two consecutive months
June 10, 2013
In May, consumer prices rose 0.1% over the previous month, which came in above the flat reading observed in the preceding month. The monthly increase was mainly the result of higher prices for alcoholic beverages and tobacco as well as for clothing and footwear.
Despite monthly increase, inflation remained in negative territory for a second consecutive month in May, with consumer prices falling 0.1% over the same month last year, which, nevertheless, was above the 0.4% drop seen in April. Meanwhile, HICP annual inflation (based on the harmonized index of consumer prices) swung from plus 0.3% in March to minus 0.4% in April, the latest month for which data are available. As a result, annual average HICP inflation dropped to 1.3% (March: 1.6% year-on-year).
The Central Bank expects HICP inflation to average 2.0% in 2013. FocusEconomics Consensus Forecast panellists expect HICP inflation to average 1.8% this year, which is unchanged from last month's projection. For 2014, the panel expects HICP inflation to average 2.8%.
Author: Ricardo Aceves, Senior Economist