Latvia's consumer price index (CPI) grew 3.4% y/y in April, data released by the Central Statistical Bureau (CSB) on May 11 showed.
The reading sees price growth maintaining the pace set in March and marks the tenth successive month of positive inflation. The growth trend is in line with forecasts for a decisive pick up of inflation this year after the index barely moved in 2016.
Of the Baltic states, Latvia is the only one not to see inflation accelerate in April, after inflation kept on surging in Lithuania and Estonia. Still, the pace of price growth still suggests tightened labour markets and the return of EU-funded investment are pushing significant demand-led price pressures.
In monthly terms, prices grew 0.4%, 0.5pp slower than in the previous month. All segments – with an exception of clothing and footwear, where prices fell 0.7% y/y – recorded annual price growth. Prices in the communication and food segments segment grew the fastest, at 7.4% and 5.3%, respectively.
CPI is expected to grow an average 1.8% in 2017, according to the European Commission. Swedbank is less conservative, predicting prices will grow 2.5%. The index added just 0.1% last year, tipped into the black by a surge in December.