Analytics, Banks, Economics, Inflation, Latvia

International Internet Magazine. Baltic States news & analytics Friday, 25.06.2021, 05:07

Bank analysts predict annual deflation in June will be below 1%

BC, Riga, 08.07.2020.Print version
Consumer prices in Latvia in June this year may have increased by about 0.2% compared to May, but during the year - in June of this year compared to June of last year - there may have been deflation below 1 percent, bank analysts predicted to LETA.

Swedbank economist Laimdota Komare told LETA that in June, compared to May, consumer prices could have risen by about 0.2%, when compared to the same month last year there could be a deflation below 1%. 

"The increase in prices during the month was most likely due to the rise in fuel prices, but the faster rise in prices was most likely curbed by lower prices for clothing and footwear. Heating tariffs in Riga have also become slightly cheaper," Komare said.

In turn, SEB Banka's macroeconomic expert Dainis Gaspuitis forecasted to LETA that in June consumer prices could have increased by 0.2% compared to the previous month, with annual deflation at around 0.7%. 

"In June, the price level probably increased slightly," Gaspuitis said.

He mentioned that the rise in consumer prices during the month was mainly due to the recovery in fuel prices. Food prices may also have risen, and there may have been a slight increase in services that have benefited from the economic recovery.

At the same time, heating tariffs did not change in June - they are expected to decrease in August. In turn, prices may have fallen for clothing and footwear, he said.

"Thus, inflation is expected to be 0.2% in June, with deflation at around -0.7% during the year," Gaspuitis said.

As reported, in May 2020, Latvian consumer prices declined 0.4% from April but remained unchanged against May 2019, according to the data released today by the Central Statistical Bureau (CSB). During the last 12 months, consumer prices rose 2% against the previous 12-month period in May.

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