Annual deflation still in place in February

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Latest data released March 8 from the Central Statistical Bureau (CSB) show that in February 2021, compared to February 2020, the average level of consumer prices decreased by 0.2 %.

Prices of goods fell by 0.7 %, while prices of services rose by 0.9 %.

"Compared to February 2020, in February 2021 the average level of consumer prices was mainly influenced by the drop in prices of goods and services related to housing, goods and services related to transport, clothing and footwear, food and non-alcoholic beverages, as well as rise in prices of recreational and cultural goods and services, and health care," the CSB said.

The month-to-month figures did provide some evidence deflationary pressure may be easing. Compared to January 2021, in February 2021 the average level of consumer prices increased by 0.4 %. The average price level for goods increased by 0.6 %, while for services it decreased by 0.1 %.

Latvia inflation Jan-Feb 2021
Latvia inflation Jan-Feb 2021

Compared to 2015, consumer prices in February 2021 were 9.2 % higher. Prices of goods rose by 6.9 %, while prices of services - by 14.7 %.

It should be noted that the CSB also stressed that gathering data had been complicated by Covid-19 restrictions. The consumer price survey is conducted in Rīga and ten other cities and towns every month from the 4th to 20th of the month.

Due to Covid-19, there were various restrictions during all the registration period in February. As of 8 February, all goods could be sold face to face in those stores, where 70 % of the assortment was food or articles for personal hygiene. In other stores face-to-face trade was available only partially. In February restrictions mostly affected catering services, personal grooming services, education, recreational and sporting services, as well as several non-food product retail, which were not available for purchase in face to face trade, and could be offered for remote purchase only by some enterprises.

Restrictions on international transport became tighter, and the bans on recreational, sporting and cultural services remained in force. As a result of restrictions imposed on trade, share of prices collected remotely (using Internet resources and telephone interviews) stayed high in February. Approximately 25 thousand prices are collected every month for calculations of the consumer price index.

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