RIGA - Inflation in Latvia should level out with average price increase in the European Union, and shouldn't rise any higher this year, Finance Minister Oskars Spurdzins said.
"At present the turning point might have set in 's a certain stabilization of inflation with a possible fall toward the end of the year," said the minister, adding that overall economic growth this year could be as high as last year, or around 8 percent.
Still, Latvia is a small economy and is unable to avoid external forces such as rising oil prices, Spurdzins added. "We can just watch if we don't have any agreements between traders, if overly high prices are not being dictated here," he said.
The consumer price index (CPI) soared by an average of 6.2 percent in Latvia last year, marking the highest growth since 1997. Growing foodstuff prices left the biggest effect on the CPI, with gas prices and healthcare services also jumping significantly. Electricity prices also increased last year. The country currently has the highest inflation in the European Union.
Spurdzins did not rule out that gas prices might rise, even though the public utilities regulator recently rejected a request by Latvijas Gaze to raise tariffs.
"I do not rule out that it [increase of gas price] could be inevitable in the future for a certain amount. Of course, our prices will gradually level out with European prices 's that is inevitable and we would fool ourselves saying that it will not happen," the minister said.
He underscored that in order to keep the public from feeling the sharp change, compensation methods for the price increase should be found.
This could be done through social programs or other similar methods.
