Analytics, Inflation, Latvia, Markets and Companies

During last 12 months the average level of consumer prices^2, compared to the previous 12 months, grew by 0.2%.

Changes in consumer prices in 2015 and 2016 (% over the corresponding month of the previous year)

The greatest downward impact on the average level of consumer prices in January 2016  as compared to January 2015, was done by goods and services related to housing, food and non-alcoholic beverages, goods and services related to transport, whereas the strongest upward impact was done by alcoholic beverages and tobacco products, health services, restaurant and hotel services.

The average level of food prices in January 2016 in comparison with the corresponding month of the previous year went down by 0.3%. The price reduction was mostly caused by milk and dairy products, mainly by sour cream and kefir. The prices of cheese and curd, milk and yoghurt also decreased. Butter, coffee, bakery products became cheaper, whereas the prices increased for vegetables, poultry, pasta, eggs, flours and other cereals, chocolate.

Commodity group impact on the Consumer Price Index (CPI) during the last 12 months (% points)

The average price level of alcoholic beverages increased by 3.0% that was essentially caused by the rise in prices of beer. More expensive were spirits and wine. Prices of tobacco products went up by 2.0%.

During the year prices of goods and services related to housing decreased by 3.9%. Heat energy, natural gas, electricity became cheaper, whereas the prices for maintenance and repair of the dwelling services as well as maintenance charges in multi-occupied buildings went up.

The average level of prices for health services rose by 2.2% that was caused by the increase of prices for pharmaceutical products and dental services.

In the group of transport the price level went down by 0.5% on average. The average price level for fuels for transport decreased by 6.6%, that was most significantly affected by the drop of prices for diesel and liquid petroleum gas. Compared to the previous year, cheaper were services of passenger transport by air, spare parts and accessories for personal transport equipment, whereas more expensive became services of passenger transport by bus and tram, maintenance and repairs services of personal transport equipment, roadworthiness tests of motor vehicles.

As compared to January of the previous year, prices for restaurant and hotel services rose by 1.9%. In cafes and restaurants prices went up by 2.1%, in canteens – by 2.3%. The average price level for hotel services decreased by 5.8% during the year.

In other consumption groups the most significant reduction of prices was for package holidays, cleaning and maintenance products, clothing, personal hygiene and beauty products.

Compared to the December 2015, in January 2016 the average consumer price level decreased by 0.6%. Prices of goods reduced by 0.7%, but prices of services – by 0.2%.

The greatest impact on the price changes in January had the drop in prices for clothing and footwear, goods and services related to transport, alcoholic beverages and tobacco products, goods and services related to housing, as well as the rise in prices of personal care goods and services, food and non-alcoholic beverages.

Prices for food increased by 0.3% during the month. Price changes in the group of food were mainly affected by the rise in prices for vegetables by 7.3%, prices increasing mainly for tomatoes and sweet pepper. Affected by the end of sales, the average price level increased for poultry, coffee, pasta, vegetable oil, chocolate. Whereas, prices for dried, salted or smoked meat, fruit, milk products, bakery products and pork decreased.

Affected by the end of sales, the average price level of alcoholic beverages and tobacco products decreased by 1.0%. Prices for tobacco products went up by 0.9%.

Affected by discounts and sales that is inherent in January, the prices of clothing dropped by 7.5%, the prices of footwear – by 4.1%.

During the month the average level of electricity prices decreased by 1.8%, affected by the drop in trade prices for some Latvenergo Elektrum tariff plans as of 1 January 2016. Cheaper was natural gas. Prices for maintenance charges in multi-occupied buildings increased.

In transport group the average price level went down by 1.9% that was mainly affected by the drop in prices for fuels for transport by 3.3%. Under the influence of seasonal factors the prices reduced for passenger transport by air and water. As of 1 January 2016, prices increased for roadworthiness tests of motor vehicles.

In other consumption groups the most significant drop in prices was for package holidays. Whereas prices for personal hygiene and beauty products increased.

Consumer price changes by commodity group, %

Sub-indices having the greatest impacts, percentage points

More detailed information on consumer price changes is available in the CSB database chapter “Consumer prices”.

¹ The annual inflation characterises consumer prices changes comparing the average price level in the reference month with the average price level in the corresponding month of the previous year.

² The average annual inflation characterises the average consumer price level of the last 12 months in comparison with the average consumer price level in 12 months of the previous year. This indicator is mainly used for macroeconomic analysis, investigating inflation processes over a longer time period, since it is practically not affected by short-term or temporary price fluctuations.