Analytics, Inflation, Latvia

The increase of the prices of fresh vegetables, fruit and motor fuel, as well as price decrease of clothing and housing maintenance services had the major impact on consumer price changes in January.

Due to the seasonal factors prices of fresh vegetables rose by 27.6%, but prices of fruit – by 6.7% having the biggest upward impact on headline rate of inflation. Prices increase was recorded also for milk and dairy products, cheese, fish and non-alcoholic beverages. Due to the end of special offers prices of vine and beer increased by 2.8% and 2.7%, respectively.

Motor fuel became more expensive by 3.4%, of which petrol – by 3.3%, and diesel – by 4.5%.

Higher prices were recorded for passenger transport services and services of maintenance and repair of personal transport equipment.

Due to seasonal sales prices of clothing and footwear decreased by 6.5% and 3.0% respectively.

Consumer price changes were influenced also by lower prices of natural gas, maintenance services in multi-occupied buildings, hospital and outpatient services, rents, telecommunication services, recreational and sporting services, package holidays, and airline tickets.

Compared to January of previous year, consumer prices have decreased by 3.1%. The average price level for goods decreased by 2.9%, but for services – by 3.8%. The annual average rate of change in January 2010 was 2.5%.

In 2010 the Consumer Price Index (CPI) basket is revised and updated. The weights used in the calculations of the index reflect household expenditure pattern from 4th quarter 2008 until 3rd quarter of 2009 (including).

In 2010 for the calculation of CPI each month in 2.1 thsd outlets all around the country approximately 19000 prices of 479 goods and services are collected.

Consumer price change by commodity groups, %:

Commodity group	Weight, %	January 2009- January 2010	December 2009- January 2010
Total	100.0	-3.1	0.2
Food	24.3	-7.8	1.8
Alcoholic beverages and tobacco	7.3	15.2	0.9
Clothing and footwear	5.9	-7.5	-5.1
Housing, water, electricity, gas and fuels	14.7	-13.9	-1.1
Furnishing, household equipment and operation	4.6	-6.0	-0.4
Health care	6.1	10.5	-1.1
Transport	12.9	6.0	2.5
Communication	5.0	-4.7	-0.3
Recreation and culture	7.6	-3.0	-1.1
Education	1.8	8.2	-0.2
Hotels and public catering	4.3	-8.7	-0.4
Miscellaneous goods and services	5.6	-2.7	0.3

Sub-indices with most important impacts:

December 2009- January 2010	Impact (percentage points)
Vegetables	+0.31
Fuels	+0.20
Alcoholic beverages	+0.07
Passenger transport services	+0.07
Footwear	-0.05
Gas	-0.05
Services relating to the dwelling	-0.09
Clothing	-0.25