Analytics, Economics, Financial Services, Good for Business, Latvia

Compared to the same month a year ago, consumer prices moved up by 0.5 % in July this year, according to the latest data released by the Central Statistical Bureau. 

The Finance Ministry said that the return of inflation was ensured by monthly price increases untypical for July, as energy, food products and services rose in price last month. On the whole, price dynamics in  July showed that demand in the economy has been returning quite quickly, which was reflected in a 0.2% monthly inflation. 

Fuel prices in Latvia climbed 3.4% m-o-m as forecasts of a further drop of the oil price on the Covid-19 crisis did not come true. As compared to July 2019, fuel prices fell 11.2% in July 2020, whereas in previous months they had fallen by approximately 20%. 

The Finance Ministry indicated that, following global trends, Latvian prices of food products and nonalcoholic beverages rose 0.6% m-o-m, even though traditionally these prices tend to drop in July on the arrival of seasonal fruit and vegetables. In annual terms, food prices declined 2.8% in July as compared to 1% in June and more than 3% in previous months.

As reported, the average level of consumer prices this past July as compared to June increased 0.2%, while compared to July 2019, the average level of consumer prices has increased by 0.5%, which means that after two months of deflation, inflation has returned to Latvia, according to the Central Statistical Bureau's data released on Monday.

Compared to June 2020, in July 2020 the average level of service prices went up by 0.5 % and of goods by 0.1%. Y-o-y, prices of services have increased 1.6%, while prices of goods have not changed.