More bad news on inflation

RIGA -- While members of the Saeima were giving a second reading to their 2008 budget proposals, Latvia's Office of National Statistics released further evidence of the nation's seriously overheating economy.

During October, inflation rose to 13.2 percent year-on-year, up from 11.4 percent in September and above the estimates of most economic analysts.

Continued rapid rises in food prices are a major contributory factor, along with similar rises in wages and fuel costs.

Estonian inflation also rose in Septemeber, but by a smaller margin than Latvia's, from 7.5 to 8.5 percent year-on-year.

Commenting on the figures, Danske Bank analyst Lars Christensen said: "It seems like there is no end to the rise in inflation in the three Baltic states and with the expected rise in gas prices in 2008 we are likely to hit double-digit inflation numbers in all three Baltic states 's and in Latvia, inflation could rise to well above 15%."