Inflation picks up pace

Latvia's inflation rate showed signs of coming back to life in January after a lengthy slumber. 

Consumer prices increased by 0.1% in January compared to December last year and were 2.9% higher than in January 2016 -- the highest annual monthly inflation rate since mid-2011. 

"On a yearly basis, food and fuel prices were the main drivers of inflation. In January this year, compared to January 2016, food prices increased by 6.9%, reflecting growing global agricultural commodity prices. Fuel prices increased by 14.8% annually. This is a result of a significant fall in energy commodity prices in the beginning of 2016, which have moderately recovered now," said Swedbank in a commentary. 

The Central Statistical Bureau also revised its household consumer basket weights for goods and services. Goods account for around 70% of consumption and services for around 30%.

"As wages have been growing and consumer price growth was moderate in 2016, the weight of food in the consumer basket continued to decline while the weight of services increased," Swedbank said, adding that its forecast for average annual inflation in 2017 is 2.5%.

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