Latvian CPI flat in August

Latvian CPI flat in August
By bne IntelliNews September 8, 2016

Latvia's consumer price index (CPI) remained flat in annual terms in August, data released by the Central Statistical Bureau (CSB) on September 8 showed.

The reading comes after July recorded the first positive inflation reading – 0.1% - in annual terms in 2016. That sees August the second month in a row that the CPI has evaded deflation. In monthly terms, however, prices fell 0.7% in August, clearly faster then the drop of 0.3% in July. 

As has been standard recently, it was price falls in the transport sector - last month by 3.7% y/y - that proved the main drag on the headline index. Prices in the clothing and footwear segment also declined, by 2.3%.

Those falls were balanced by rises in most other segments. The communication segment enjoyed the biggest gain of 3.6%. Food prices grew more slowly, at 0.5%, against 0.9% in July.

“As commodity prices continue to recover, we expect that goods prices will slowly grow and add to positive annual inflation. However, for 2016 in total we forecast average annual inflation [at] 0% due to deflation in the first half of the year,” Swedbank writes. The European Commission forecast in the spring that Latvian CPI will rise just 0.2% through the full year.