Deflation returns in February

Compared to February 2014, the average Latvian consumer price level in February 2015 declined by 0.1% according to official data released Monday.

Prices of goods decreased by 1.0%, while prices of services grew by 2.4%.

According to the latest data of the Central Statistical Bureau (CSB), compared to the previous 12 months, the average consumer price level over the last 12 months, increased by 0.5%.

Commenting on the change, Swedbank Latvia economist Lija Strasuna said: "In line with our expectations, consumer prices in February were again slightly lower than a year ago... In monthly terms, prices increased by 0.2% owing to fuel prices rising after half a year of falling, as well as a hike in public transportation prices in Riga.

"Without an electricity price increase in January (due to market liberalisation and abandoning those tariffs that were previously subsidized) and the hike in public transportation prices, annual deflation would be more than 1%, similar to what we see in other Baltic countries."

This year consumer price growth is expected to be very weak, Swedbank forecasts about 0.5%.

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