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Inflation in Latvia reached 2.6% in December 2018

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Compared to December 2017, the average level of consumer prices rose by 2.6 % in December 2018. Prices of goods increased by 2.3 % and prices of services by 3.1 %. 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 %. Compared to December 2017, in December 2018 the average level of consumer prices was mainly influenced by the rise in prices of goods and services related to housing, alcoholic beverages and tobacco products, goods and services related to transport, restaurant and hotel services, health care, as well as prices in miscellaneous goods and services group, according to data from the Central Statistical Bureau of Latvia.
 

Unlike in 2017 when comparatively sharp rise, especially in prices of milk and milk products, eggs, meat and meat products, was recorded, in 2018 food price increase was more moderate. Over the year, prices within the group of food and non-alcoholic beverages increased by 0.6 %. The strongest upward influence on the average price level within the group was exerted by the prices of bread (rise of 7.9 %) as well as flours and other cereals (7.3 %) which grew due to the dry and hot summer of 2018 leading to notably lower cereal yield in Europe.
 

Over the year, increase was also recorded in prices of fruit and vegetable juices (of 11.7 %), meat products (7.5 %), potatoes (10.5 %), bakery products (2.1 %), chocolate (4.2 %), dried fruit and nuts (9.2 %), and pork (1.4 %). Along with the decline in global market, sugar price fell by 18.1 %. Reduction was also registered in prices of dried, salted or smoked meat (of 1.7 %), poultry (2.0 %), butter (5.6 %), and eggs (3.0 %). Prices of fresh fruit had dropped by 8.4 %. Downturn was also recorded in prices of fresh vegetables (of 1.2 %), which was partly influenced by the reduction of VAT on vegetables characteristic in Latvia as of 1 January 2018.
 

The average level of prices of alcoholic beverages and tobacco products went up by 6.0 %. Over the year, the price rise was influenced by higher excise duty on majority of alcoholic beverages introduced as of 1 March 2018, as well as higher excise duty on cigarettes as of 1 July 2018. Prices of alcoholic beverages grew by 5.9 %, which was mainly influenced by the rise in prices of spirits, beer and wine. Prices of tobacco products grew on average by 6.1 %.
 

Prices of goods and services related to housing increased by 4.8 %, which was caused by the increase in prices of several utility services as well as firewood over the year. An upturn was registered in prices of solid fuels, water supply, sewage collection, natural gas, in maintenance charges in multi-occupied buildings and rentals for housing, prices of heat energy, refuse collection, as well as services for the maintenance and repair of the dwelling. In its turn, the average level of electricity prices fell.
 

Within the health care group, the average level of prices rose by 2.7 %, which was mainly due to the increase in prices of dental services. Growth was registered also in prices in medical specialist practice and prices of pharmaceutical products.
 

Within the group of goods and services related to transport, the main upward pressure was applied by prices of fuels for transport (increase of 8.2 %). Prices of diesel grew by 11.5 %, of petrol by 2.8 %, and of auto gas by 13.3 %. Increase was also recorded in prices of maintenance and repair of personal transport equipment, while prices of second-hand motor cars and passenger transport by air fell.
 

The average level of restaurant and hotel service prices went up by 4.0 %. The rise was mainly affected by catering services – the average level of restaurant and café service prices increased by 4.3 %, of canteen services by 3.7 %, and of fast food services by 3.3 %.
 

Within the group of miscellaneous goods and services, the average level of prices grew by 2.9 %, which was mostly due to the rise in prices of services in hairdressing saloons and personal grooming establishments, and prices of motor vehicle insurance and financial services.
 

Among other commodity groups, the most significant growth was recorded in prices of television subscription fee, garments, telecommunication services, as well as household cleaning and maintenance products. In its turn, the average level of package holiday prices fell.
 

Compared to November, the average level of consumer prices decreased by 0.4 % in December 2018. 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.
 

Over the month, the average level of prices of food and non-alcoholic beverages went up by 0.6 %. The greatest upward pressure on the consumer price changes was put by the rise in prices of bread (of 2.7 %), dried, salted or smoked meat (1.0 %), fresh vegetables (1.6 %), cheese and curd (1.5 %), chocolate (3.2 %), yoghurt (2.9 %), sour cream (3.0 %), olive oil (9.1 %), and pasta products (4.3 %). Decline, in turn, was registered in prices of fresh fruit (of 1.9 %), coffee (1.9 %), eggs (2.5 %), and milk (1.8 %).
 

Due to the influence exerted by discounts, the average level of garment prices fell by 2.2 % and of footwear prices by 4.6 %.
 

Prices of furnishings on average had dropped by 1.9 %. Sales of household cleaning and maintenance products resulted in a decline of prices thereof by 4.6 %. Reduction was also recorded in prices of non-electric kitchen utensils and articles, as well as dishes.
 

Prices of goods and services related to transport decreased by 0.8 %, which was mostly influenced by the decline in prices of fuels for transport (of 4.7 %), of which diesel of 4.4 % and petrol of 5.9 %. The monthly changes in prices of fuels for transport reflect current trends in the global oil market showing a price drop. In its turn, prices of passenger transport by air, maintenance and repair of personal transport equipment, as well as passenger transport by sea increased.
 

The changes in the average level of prices within miscellaneous goods and services group (drop of 1.6 %) mainly were affected by the decrease in prices of articles for personal hygiene and beauty products.
 

Among other consumption groups, the most significant drop was recorded in prices of spirits, wine, pet food, toys and package holidays. In its turn, the average level of prices of beer and catering services rose.

BNN

11-01-2019
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