Analytics, Economics, Inflation, Latvia, Statistics

Compared to 2015, in August 2020 consumer prices were 8.6% higher. Prices of goods increased by 6.0% and prices of services by 15.2%.

Compared to August 2019, in August 2020 the average level of consumer prices was mainly influenced by the drop in prices of goods and services related to housing, goods and services related to transport, clothing and footwear, as well as rise in prices of food and non-alcoholic beverages, health care, goods and services related to recreation and culture, restaurant and hotel services.

Over the year, prices within the group of food and non-alcoholic beverages increased by 2.0%. Prices of fresh fruit (up by 23.8%), including of apples, oranges and pears 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 7.3%) and meat products (5.0 %). Increase was recorded in prices of buckwheat (of 20.7%), breakfast cereals (12.0%), bakery products (1.8%), chocolate (3.9%), ice cream (4.7%) and bread (1.2%). Decline, in turn, was registered in prices of fresh vegetables (of 7.1%), potatoes (15.3%), poultry (3.3%), milk (5.1%) and milk products (1.5%).

The average level of clothing and footwear prices fell by 0.3%. Prices of garments reduced on average by 0.3%, but of footwear – by 0.1%.

Prices of goods and services related to housing fell by 4.2%, which was mainly affected by price drop of heat energy, natural gas, electricity, solid fuels and rentals for housing.

Within the health care group, the average level of prices rose by 3.2%, 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 4.3%, which was affected by the drop in prices of fuels for transport (of 11.5%), mainly diesel (of 12.1%). Prices of petrol reduced by 11.1% and of auto gas – by 9.4%. Increase over the year was observed in prices of passenger transport by road, maintenance and repair of personal transport equipment.

Goods and services related to recreation and culture became more expensive by 2.0%. During the year, average level of prices increased for recreation and sports services, flowers, newspapers and magazines.

The average level of restaurant and hotel service prices went up by 3.0 %. Price rise was mainly affected by catering services, as the average level of restaurant and café service prices increased by 2.3% and that of canteen services by 4.9%.

The most significant downturns among other commodity groups were recorded in prices of motor vehicle insurance, spirits and beer, while upturns were recorded in prices of tobacco products, articles for personal hygiene and beauty products.

During the month, the average level of consumer prices fell by 0.5%

Compared to July 2020, in August 2020 the average level of consumer prices reduced by 0.5%. The average level of prices of goods fell by 0.9%, while of service prices – rose by 0.4%.

The greatest pressure on the price changes was put by the drop in prices of food and non-alcoholic beverages, goods and services related to housing, goods and services related to transport, clothing and footwear, as well as by the rise in prices of goods and services related to recreation and culture.

Over the month, prices of food and non-alcoholic beverages declined by 1.2%. Under the influence of seasonal factors price drop of fresh vegetables (of 9.6%) and potatoes (23.4%) had the strongest downward influence on the average price level within the group. Prices of poultry reduced by 5.6%, of milk by 3.3%, of pork by 1.9%, of pasta products by 5.5%, of cheese and curd by 1.2%, which was mainly affected by the sales campaigns. In turn, prices of fresh fruit went up by 3.5%, of bakery products by 1.1%, of butter by 3.5% and of fresh or chilled fish by 4.8%.

The average level of prices within clothing and footwear group fell by 1.0%. Price drop for footwear (of 3.4%) and garments (0.5%) mainly was influenced by discounts.

Average price level of goods and services related to housing dropped by 0.7%, which was mainly influenced by lower heat energy tariffs in Riga, reducing the average level of heat energy prices by 4.5%. Price drop influenced by discounts was observed for materials for the maintenance and repairs of the dwelling (1.1%). In turn, an increase was registered in rentals for housing (on average of 1.9%), water supply (2.6%) and sewage collection (2.7%).

Prices of goods and services related to transport fell on average by 0.6%. Prices of fuels for transport went down by 0.5%, of which prices of diesel by 0.6%, of petrol by – 0.6%, but of auto gas – went up by 0.2%. Prices of passenger transport by air reduced.

The average level of prices on goods and services related to recreation and culture rose by 0.8%, which was mainly influenced by the increase in prices of personal computers and cameras. Prices of flowers, stationery and drawing materials went down.

Among other commodity groups, the most notable drop was registered in prices of articles for personal hygiene and beauty products, household cleaning and maintenance products, wine and beer. In turn, prices of dental services went up.

Price changes by commodity group
(as per cent)

COVID-19 influence on consumer price index in August

In August total number of imputations related to Covid-19 dropped to 0.7%, which is 1.2% of total household consumption expenditure.

Significant Covid-19 impact remained in two ECOICOP (European Classification of Individual Consumption according to Purpose) sub-classes – Passenger transport by sea (share of imputation 100%); Package holidays (share of imputation 91%). Imputations were calculated by the methods mentioned below in accordance with recommendations of Eurostat for compilation of indices under the impact of Covid-19:

1. Imputation with the annual rate of change of all reliable price indices
   (in August 2020 annual consumer price index of all "reliable” indices constituted 99.8);
2. Imputation based on available prices for the same product.

Indices with significant number of imputations (> 50%) caused by Covid-19 and thus having lower quality in the CSB database are indicated with "u".