Energy resource prices beginning to affect inflation in Latvia

RIGA - Consumer prices increased rather steeply in March 2012, mostly due to seasonal factors, however, high prices for energy resources are also starting to affect inflation, The Baltic Course writes, referring to the Finance Ministry.

Compared to February, consumer prices grew by 0.6 percent in March. The greatest upward pressures came from clothing, fuel and vegetable prices.

The ministry points out that the news about new fuel price records came as an unpleasant surprise last month. Not only Europe, but also the United States experienced similar problems, where fuel prices exceeded last year's record-highs in several states.

Euro to dollar exchange rates, which were unfavorably low during the first few months of 2012, affected fuel prices alongside high oil prices in Europe.

The ministry explains that short-term data on oil product prices and exchange rate fluctuations indicate that the price hikes have slowed down. However, this does not relieve the pressure on other market members, taking into account the current level of fuel prices, which remains high.

According to the ministry, average annual inflation, which is taken into account when assessing the Maastricht criteria, continues to gradually reduce, dropping to 4.2 percent in March. The ministry thoroughly assesses consumer price changes, potential price hike scenarios to ensure the fulfillment of Maastricht criteria and long-term price stability.