Analytics, Covid-19, Inflation, Latvia, Markets and Companies

Over the year, prices within the group of food and non-alcoholic beverages increased by 1.0 %. Prices of fresh fruit (up by +24.6 %), including of apples, pears, oranges and lemons, had the most significant upward impact on the average price level within the group. Upturn was registered also in prices of dried, salted or smoked meat (of +8.4 %), meat products (+6.8 %) and pork (+1.5%). Increase was recorded in prices of bakery products (of 5.4 %), fresh or chilled fish (9.8 %), buckwheat (13.3%), coffee (1.8 %), preserved or processed fish and seafood-based preparations (3.8 %), breakfast cereals (8.0 %), pasta products (4.7 %). sugar (3.3 %), and bread (0.6 %). Decline, in turn, was registered in prices of fresh vegetables (of 14.4 %), potatoes (39.3 %), cheese and curd (2.3 %), eggs (2.8 %), butter (3.9 %), milk products (1.0 %) and chocolate (1.7 %).

The average level of clothing and footwear prices fell by 2.7 %. Prices of footwear reduced on average by 5.2 % and of garments – by 1.6 %.

Over the year, prices of goods and services related to housing dropped on average by 2.3 %. Decline was recorded in prices of natural gas, electricity, rentals for housing, solid fuels, water supply and sewage collection, while increase was registered in prices of maintenance charges in multi-occupied buildings, services for the maintenance and repairs of the dwelling, refuse collection, heat energy, materials for the maintenance and repairs of the dwelling.

Within the health care group, the average level of prices rose by 2.6 %, which was mainly influenced by the increase in prices of dental services, prices in general medical practice, as well as prices in medical specialist practice. Downturn was registered in prices of pharmaceutical products.

Prices of goods and services related to transport declined by 6.2 %, which was affected by the drop in prices of fuels for transport (of 16.0 %), mainly diesel (of 16.6 %). Prices of petrol reduced by 15.4 % and of auto gas – by 15.3 %. Increase over the year was observed in prices of passenger transport by road, maintenance and repair of personal transport equipment, as well as passenger transport by train.

Goods and services related to recreation and culture became more expensive by 1.8 %. During the year, average level of prices increased for recreation and sports services, newspapers and magazines, pet food, toys.

The average level of restaurant and hotel service prices went up by 2.5 %. Price rise was mainly affected by catering services, as the average level of restaurant and café service prices increased by 2.7 % and that of canteen services by 4.6 %.

The most significant downturns among other commodity groups were recorded in prices of motor vehicle insurance, spirits, beer and wine. Upturns, in turn, were registered in prices of tobacco products and telecommunication services.

Price changes by commodity group (as per cent)

During the month, the average level of consumer prices rose by 0.2 %.

Compared to May 2020, in June 2020 the average level of consumer prices increased by 0.2 %. The average level of service prices went up by 0.5 % and of goods – by 0.1 %. The greatest pressure on the price changes was put by the rise in prices of goods and services related to transport, goods and services related to recreation and culture, prices in miscellaneous goods and services group, as well as by the drop in prices of food and non-alcoholic beverages, clothing and footwear, goods and services related to housing.

Over the month, prices of food and non-alcoholic beverages declined by 1.4 %. Price drop of fresh vegetables (of 9.5 %) had the strongest downward influence on the average price level within the group. Downturn was registered also in prices of dried, salted or smoked meat (of 2.5 %), poultry (4.2 %), fresh fruit (2.8 %). Due to the discounts, prices of bread fell by 1.8 %, of chocolate by 4.1 %. Downturn was also registered in prices of pork (of 2.1 %) and butter (5.5 %). In turn, under the influence of seasonal factors prices of potatoes went up by 15.4 %. Due to the end of sales campaigns, increase was recorded in prices of fresh or chilled fish (of 11.7 %).

The average level of prices within clothing and footwear group fell by 1.6 %. Price drop mainly was influenced by discounts on footwear (of 4.0 %) and garments (0.6 %).

Prices of goods and services related to housing dropped by 0.5 %. As refuse collection organization scheme in Riga changed, the average level of prices of refuse collection reduced by 5.4 %. Downturn was registered in prices of heat energy (of 2.0 %). In turn, upturn of 1.0 % was registered in rentals for housing.

Prices of goods and services related to transport rose on average by 3.8 %. Prices of fuels for transport went up by 9.2 %, of which prices of diesel by 8.9 %, of petrol by – 10.6 %, and of auto gas – by 4.3 %.

Within the recreation and culture group, the average level of prices went up by 1.5 %. Upturn was observed in prices of pet food and fiction books. As restrictions were eased, several recreation and sports services became available again. Average level of prices of recreation and sports services grew by 1.3 %.

Within the miscellaneous goods and services group, average level of prices increased by 0.9 %, which was affected by the end of sales campaigns on articles for personal hygiene and beauty products. The average level of motor vehicle insurance prices reduced.

Among other commodity groups, the most notable rise was registered in prices of glasses and contact lenses, but drop – in prices of wine and hotel services.

COVID-19 influence on consumer price index in June

Data collection

The consumer price survey is conducted in Riga and ten other cities and towns from 4th to 20th date. Price collection is performed by trained CSB employees by visiting sampled trade and services outlets, collecting prices online, or conducting telephone interviews.

Due to the restrictions introduced due to the COVID-19, the share of prices collected remotely (using Internet resources and telephone interviews) has increased.

In June approximately 3 % of prices were collected with one of the alternative price collection options (the share represents only the prices usually collected by visiting registration places).

Data quality

Consumer price index calculations each month are based on approximately 25 thousand prices. All price data collected in June, including prices collected remotely, underwent standard validation procedures. No atypical or unjustified decreases or increases that could not be explained by global and seasonal trends were observed. At the end of the data validation, there was no evidence that use of the alternative methods had affected dynamics of price changes or quality of the data. Thus, all price data collected within the survey meet methodology and quality requirements.

Prices that were not available due to the COVID-19 crisis were imputed. Sub-indices quality whereof was influenced significantly are listed in the imputations section. Indices with significant number of imputations (> 50%) caused by COVID-19 and thus having lower quality in the CSB database are indicated with "u".

The share of imputations may differ notably depending on the commodity group, however the share of COVID-19-caused imputations in the total data in June accounts for 1.5 %, which is 2.8 % of total consumption expenditure.

Sample and weights

In line with the consumer price index calculation methodology, weight structure and sample shall be constant throughout the whole year. Therefore, irrespective of the zero activity or significant activity decline in selected sectors, no changes were made in the weights or sample.

Imputations in the calculations caused by the COVID-19 crisis

In June in several commodity groups there were prices not observed due to the COVID-19 crisis. The missing prices were imputed using one of the four methods:

1. Imputation based on available prices for the same product;
2. The last observed price was used (carry forward);
3. Imputation of the monthly price change of the corresponding month of the previous year;
4. Imputation with the annual rate of change of all reliable price indices.

The first imputation method was used in cases when under the influence of COVID-19 crisis product or service was only partially available, i.e., not in all sampled trade and services outlets, but still was available in sufficient quantity to represent the general price movement.

The second method was used in cases when prices of a good or service are stable, are changing rarely or mostly at the beginning of the year, are fully or partially administered, and there is a reason to believe that after lifting restrictions the good or service will be available for the same price.

The third method was used for services subjected to seasonal price fluctuations.

The fourth method was used in sectors with zero activity and pronounced seasonal pattern, such as passenger transport by air or sea, package holidays. Annual consumer price index calculation of all "reliable” indices is based on sub-class level. The sub-class index is considered "representative” if number of COVID-19 imputations is under 50 %.

In June 2020, annual consumer price index of all "reliable” indices constituted 99.3.

The calculations excluded the following sub-classes (number of imputations exceeded 50 %):

• Passenger transport by air (method 4),
• Passenger transport by sea (4),
• Cinema and theatre services (2),
• Package holidays (method 4).
• 
  
• Share of imputations made and imputation methods used by commodity group

Information on consumer price changes in July 2020 will be published on 10 August.

*The annual inflation reflects consumer price changes, comparing the average price level in the comparison month with the average price level in the corresponding month of the previous year.