Analytics, Banks, Economics, Financial Services, Inflation, Latvia

Dainis Gaspuitis, a macroeconomics expert at SEB Banka, said that in September 2016 Latvian producer prices probably edged up 0.4-0.5 % against August, which means over the year they rose 0.5-0.6% in September.

"In September, the price rate of change will again be determined mainly by seasonal fluctuations. It will be reflected most strikingly in the rise of footwear prices. This factor will also influence food prices, whose rate of change will largely determine the September inflation. But monthly inflation is not expected to change much. The heating price remained unchanged, and fuel prices changed insignificantly," the SEB economist said.

Martins Abolins, an economist at Citadele Bank, predicted a 0.5% monthly inflation in September, which would mean that the annual inflation rate has risen to 0.6% from 0% in August.

"Inflation was expected to grow in the fall as the impact of the oil price drop has been decreasing lately. This can be seen most directly in fuel prices which dropped 10.2% in August, but in September they will be only 4 % lower than a year ago. Compared to August, the fuel prices will have risen by 2%," Abolins said, adding that similar trends can be seen also in other countries and that the eurozone's inflation rose 0.4 % in September.

"Our forecasts suggest that inflation will not exceed 1 % until the end of this year as heating tariffs might continue to decline even more in November and December, but at the beginning of next year inflation will come close to 2 %," Abolins predicted.

The Central Statistics Bureau (CSB) is due to release consumer price data for September next Monday, October 10.

As reported, consumer prices in Latvia this past August, compared to July, reduced by 0.7 %, but did not change against August 2015.