LV: Latvian inflation of 0.3% y/y 3rd lowest in EU in February-Eurostat.

By bne IntelliNews March 18, 2013
Latvia posted annual inflation of 0.3% in February 2013, which was the 3rd lowest inflation rate among EU member states, according to the report by European Statistical Agency Eurostat. Estonia posted one of the highest 4% y/y annual inflation rates in the reporting month, Lithuania's inflation rate was 2.3% in February. Average EU annual inflation in the reporting month was 2% and in Eurozone 1.8%. To remind, last week head of the Bank of Latvia Ilmars Rimsevics told the press that central bank cuts inflation forecast for 2013 from previous 2% to 1%. Rimsevics commented that currency no threats to price stability are seen. Previously the the Bank of Latvia expected prices growth to stabilize at a little above 2% y/y once the heating season starts in Latvia and Januarys and Februarys data by far has beaten these expectations. Consumer prices increased by 0.3% y/y and declined by 0.1% m/m in February 2013, according to a report by Central Statistical Bureau. In February y/y inflation rate continued to decline from 0.6% y/y seen in January, 1.6% y/y seen in December, October and November, and after declining throughout 2012 from 3.6% in January 2012. To compare, CPI amounted to 11.4% in 2008, 1.2% y/y deflation was posted in 2009 and 2.5% y/y in 2010, while in 2011 4% inflation was seen. Moving average 12 months inflation was 1.8% in February 2013 (2% in January). Previously FinMin spokeswoman Lelde Kaunese commented that Januarys data leaves no doubt that Latvia is going to comply with inflation criteria for euro adoption and possibly will be among countries setting the criteria (i.e. one of the countries with lowest inflation). Analysts of SEB, Swedbank and DnB Nord banks surveyed by expect price growth of little above 0% or even deflation in the coming spring months.

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