The latest inflation data published by the Central Statistical Bureau (CSB) March 9 contained no major shocks, showing that in February 2020, compared to February 2019, the average level of consumer prices rose by 2.3 %.
Prices of goods increased by 1.9 % and prices of services by 3.1 %.
Compared to February 2019, in February 2020 the average level of consumer prices was mainly influenced by the rise in prices of food and non-alcoholic beverages, goods and services related to transport, health care, restaurant and hotel services, goods and services related to recreation and culture, as well as alcoholic beverages and tobacco products.
Compared to January 2020, in February 2020 the average level of consumer prices rose by 0.1 %. Prices of services increased by 0.5 %, while the average level of prices of goods did not change. Rise in prices of food and non-alcoholic beverages, clothing and footwear, goods and services related to recreation and culture, restaurant and hotel services, as well as decline in prices of goods and services related to transport, alcoholic beverages and tobacco products exerted the greatest influence on the price changes.
Citadele bank economist Mārtiņš Āboliņš responded to the data by suggesting February could be the last month in the near future when annual inflation in Latvia exceeds 2%, citing reduced heating tariffs and a smaller than expected hike in alcohol excise duty.
“Weaker economic growth this year could also mean slower wage growth and, consequently, slightly lower domestic service price rises. But rising food prices in the world and disruptions in production chains may also mean rising individual prices. At the moment it is very difficult to make accurate forecasts, but I think that inflation in Latvia this year could be in the range of 1.6-1.8%,” the economist said.