Annual inflation reached 2.6% in Latvia in December

The latest data released by the Central Statistical Bureau (CSB) on January 11 show that in December 2018, compared to December 2017, the average level of consumer prices rose by 2.6 %. Prices of goods increased by 2.3 % and prices of services by 3.1 %.

Over the longer term, compared to 2015, in December 2018 consumer prices were 6.4 % higher. Prices of goods increased by 5.1 % and prices of services by 9.8 %.

Latvian inflation trends

Compared to November, in December 2018 the average level of consumer prices decreased by 0.4 %. Prices of goods fell by 0.8 %, while prices of services rose by 0.6 %. The greatest pressure on the consumer price changes was put by the drop in prices of clothing and footwear, goods and services related to transport, furnishings, prices in miscellaneous goods and services group, as well as increase in prices of food and non-alcoholic beverages.

Average annual inflation over the course of 2018 was 2.5% in 2018. According to a Swedbank commentary it was "driven largely by external factors" with transport and housing accounting for approximately half of the price growth, owing mainly to higher energy prices.

"Taking into account a more moderate inflation rate and more rapid wage growth in 2018 compared to 2017, 2018 was a beneficial year for household purchasing power growth," Swedbank said. 

"This year will most likely bring similar average annual inflation as in 2018... Overall, 2019 will most likely be another rather good year for households with average wages growing faster than average prices," it added.

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