Flash comment: Latvia - February 8, 2012

08-02-2012 14:06

Latvian annual CPI inflation continues to diminish

• In annual terms CPI growth continued to decelerate. Prices in January were by 3.6% higher than a year ago (4.7% in August 2011). The most rapid price growth was observed in housing services’ (9.4%) and transport (5.6%). In the meantime, food price inflation continued to decelerate and food prices in January were just 3.7% higher than a year ago. Annual deflation was observed in clothing and footwear (-0.2%), health care (-0.1%), communications (-2.3%), and education (-2%).
• The forecast for average consumer price inflation in 2012 remains at 2.4%. In the coming months heating tariffs are anticipated to increase, although to a lesser extent than in January. Fuel price volatility will also remain high. Both these product groups are highly influenced by global oil price dynamics, as well as EUR/USD exchange rate. We expect situation to stabilize towards summer (unless the geopolitical conflict in the Middle East worsens or a new one arises).

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• CPI

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