Annual inflation in Latvia drops to 5.4% in August

RIGA - In August 2023 Latvian consumer prices declined 0.6 percent from this past July as the annual inflation rate (August 2023 against August 2022) dropped to 5.4 percent from 6.4 percent a month before, the Central Statistics Bureau reported on Friday. 

The 12-month average consumer price level increased by 15.6 percent in August compared to the previous 12 months.

Compared to July 2023, in August 2023 the average level of consumer prices reduced by 0.6 percent. Decrease in prices of food and non-alcoholic beverages (0.5 percentage points), goods and services related to housing (0.2 percentage points), miscellaneous goods and services (0.1 percentage point), as well as upturn in prices of goods and services related to transport (0.3 percentage points) contributed the most to the price level change.

Over the month, prices of food and non-alcoholic beverages declined by 1.8 percent. Price drop of fresh vegetables (17.1 percent) and potatoes (15.1 percent) had the strongest influence on the average price level. Downturn was registered in prices of fresh fruit (4.1 percent) and eggs (3.4 percent). Mainly due to the discounts prices of milk reduced by 12.4 percent, of milk products by 3.2 percent, of poultry by 1.3 percent, of butter by 3.8 percent, of sugar by 4.3 percent, of soft drinks by 4.4 percent, of bakery products by 0.7 percent, as well as of cheese and curd by 0.5 percent. In turn, rise was registered in prices of coffee by 4.1 percent, of dried, salted or smoked meat by 0.7 percent, of vegetable oil by 4.6 percent, of meat preparations 1.7 percent, of dried fruit and nuts by 5.1 percent, of pork by 0.7 percent.

Average price level of goods and services related to housing fell by 1.2 percent. During the month the most significant price drop within the group was registered for electricity (3 percent). Heat energy and solid fuels also became cheaper. In turn, prices of rentals for housing and refuse collection went up.

Prices of goods and services related to transport increased by 2.2 percent, which was mainly affected by the rise in prices of fuels for transport by 6.5 percent. Prices of diesel rose by 8.3 percent, of petrol by 5.4 percent, but of auto gas – reduced by 1.1 percent. Prices of passenger transport by air went down as well.

Within the miscellaneous goods and services group prices decreased by 1.6 percent. Prices of articles for personal hygiene and beauty products went down, which was mainly affected by the discounts.

Among other commodity groups, the most notable fall was registered in prices of footwear, household cleaning and maintenance products, fiction books, pharmaceutical products, pet food. While prices of garments, package holidays, restaurant and cafe services went up.

Compared to August 2022, in August 2023 the average level of consumer prices was mainly influenced by the rise in prices of food and non-alcoholic beverages (2.1 percentage points), alcoholic beverages and tobacco products (0.6 percentage points), health care (0.6 percentage points), goods and services related to recreation and culture (0.6 percentage points), miscellaneous goods and services group (0.5 percentage points), as well as drop in prices of goods and services related to transport (0.4 percentage points).

Over the year, prices within the group of food and non-alcoholic beverages increased by 8.2 percent. Price rise for bread (22.2 percent), bakery products (7.7 percent), pasta products (10.6 percent) had the strongest upward influence on the average price level within the group. Prices of dried, salted or smoked meat (10.9 percent), pork (16.9 percent), meat preparations (10.7 percent) also went up.

Prices increased for coffee (14.9 percent), fresh fruit (9.1 percent), fruit and vegetable juices (19.0 percent), ice cream (15.1 percent), eggs (11.8 percent), chocolate (10.4 percent), preserved or processed fish and seafood-based preparations (15.2 percent), fresh vegetables (4.6 percent), sauces and condiments (23.1 percent), olive oil (20.1 percent), cheese and curd (2.3 percent). Increase was also observed in prices of dried, other preserved or processed vegetables (15.9 percent), soft drinks (13.8 percent). In turn, fall was registered in prices of milk (13.1 percent), butter (15.8 percent), milk products (3.3 percent), as well as poultry (2.6 percent).

The average level of alcoholic beverage and tobacco product prices rose by 8.1 percent. As prices of beer, spirits and wine went up alcoholic beverages became more expensive (8.8 percent). Over the year average increase of 6.8 percent was observed in prices of tobacco products.

The average level of health care prices grew by 9.6 percent. Over the year, prices of pharmaceutical products, prices in medical specialist practice, as well as dental services went up.

Prices of goods and services related to transport reduced by 3.3 percent, which was mainly affected by the fall in prices of fuels for transport by 10.6 percent. Prices of diesel went down by 11.9 percent, of petrol – by 8.8 percent, but of auto gas – by 13.2 percent. In turn, increase was observed in prices of maintenance and repair of personal transport equipment, passenger transport by road and passenger transport by air.

Prices of goods and services related to recreation and culture rose by 8.9 percent, as prices of pet food, cultural services, recreational and sporting services, television subscription fee, flowers, newspapers and magazines went up.

The average level of restaurant and hotel service prices increased by 11.7 percent. Increase over the year was observed in prices of catering services, of which prices of restaurant and café services rose by 9.7 percent, of canteen services – by 12.2 percent and of fast-food services – by 11.0 percent. Prices of hotel services also went up.

Within the miscellaneous goods and services group, prices increased by 10.1 percent, which was mainly affected by the rise in prices of articles for personal hygiene and beauty products. Hairdressing salons and personal grooming establishment services, retirement home fee for elderly persons, motor vehicle insurance became more expensive as well.

Among other commodity groups, the most notable rise was registered for heat energy, in prices of telecommunication services, household cleaning and maintenance products, garments and water supply. In turn, prices of natural gas, solid fuels and electricity went down.