Deflation recorded in October figures in Latvia

Prices of goods fell by 1.6 %, while prices of services rose by 1.5 %.

Compared to October 2019, in October 2020 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, as well as the rise in prices of food and non-alcoholic beverages, goods and services related to recreation and culture, health care, alcoholic beverages and tobacco products, restaurant and hotel services.

In October 2020, compared to September 2020, the average level of consumer prices remained unchanged. The average price level for goods increased by 0.2 %, while the average price level for services decreased by 0.5 %. The greatest pressure on the price changes was put by the drop in prices of goods and services related to transport, goods and services related to housing, goods and services related to recreation and culture, restaurant and hotel services, as well as the rise in prices of clothing and footwear, alcoholic beverages and tobacco products.

Commenting on the figures, Swedbank said: "On November 9 the state of emergency was declared in Latvia that will have an impact on inflation in near future. As the restrictions imposed during the state of emergency mainly affect the services sector, the price growth of services will likely ease. In November, we may not see this in the statistics yet, as the services will be limited. Therefore, real changes will be reflected in the statistics a bit later. We reduced the inflation forecast to 0.4% this year. But in 2021 inflation may not exceed 1.5%."

Price changes by commodity group
(as per cent)

Compared to 2015, consumer prices in October 2020 were 8.6 % higher. Prices of goods rose by 6.2 %, while prices of services - by 14.5 %.