Annual inflation 0.7 percent in June

Consumer prices rose by 0.7% in June compared to June 2013 according to official data released by the Latvian national statistics office Tuesday.

“Compared to May, consumer prices in June 2014 rose by 0.3%. Compared to June 2013, the average consumer price level increased by 0.7%,” Latvian Statistics said in its regular bulletin.

Prices of goods decreased by 0.2%, while prices of services grew by 2.9%. The average consumer price level over the previous 12 months – generally regarded as a better indicator of trends than the year-on-year figures – increased by just 0.2%, maintaining Latvia's position as one of the eurozone countries with the greatest price stability.

The greatest inflationary pressure year-on-year was put by increased prices of alcoholic beverages and tobacco, hotel and restaurant services, and transport goods and services.

On the other hand, average food price levels in June 2014 were down 1.3% on June 2013 when a rapid price growth took place.

The Latvian Finance Ministry issued a statement on the figures saying they were “in line with [our] projections” and that the price increase was a “natural process” resulting partially from falling unemployment and increased competition in the labor market driving up wages. 

In further economic data, SEB bank reported that in June 52% of Latvian residents expected house prices to rise this year with the trend stronger still in Riga (65%).

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