Latvia's consumer price index (CPI) grew 2.2% y/y in December, data released by the country's Central Statistical Bureau (CSB) on January 10 showed.
The reading means price growth slowed down from the 2.7% y/y growth rate seen in November. Still, price growth appears to be under demand-led pressure from the tightened labour market pushing up wages; the return of EU-funded investment also plays a role.
Inflation has now grown for 16 months straight, in line with forecasts for a decisive pick-up in CPI this year after the index barely moved in 2016.
All but three segments recorded annual price growth in December. Price growth in the food and non-alcoholic beverages segment were the main driver behind the headline figure, growing 3.8% y/y, although that was a slowdown against the 4.7% y/y upward movement in November.
Prices in the segment of “miscellaneous goods” also contributed, growing 7.1% y/y, while in the housing segment, prices expanded 2% on the year. Another important driver, the transport segment, saw prices grow 2% y/y. Prices declined in the alcohol and tobacco, clothing and footwear, and furnishings segments.
In monthly terms, prices did not change, compared to an m/m growth of 0.1% in November.