Annual inflation accelerates to 2.8% in June
June has marked the fastest annual inflation rate this year. Annual inflation reached 2.8% in June. Annual growth of goods’ prices accelerated to 2.5% while service prices grew by 3.3%, a similar rate as before. In the months to come annual inflation rates are expected to remain at a similar of slightly higher level. In other words, annual inflation rates are expected to fluctuate close to 3.0% mark.
Higher transport and housing goods and service prices determined the acceleration of annual inflation rate in June. In the transport category, fuel prices increased on the back of growing oil price in end of May and beginning of June. Over the month, fuel price increased by more than 4%. Meanwhile, over the year, fuel was around 17% costlier. In the housing category, price growth was driven by water supply and other dwelling services. Over the month, prices grew by slightly above 3% while over the year – by more than 6%. To a large extent, it can be attributed to a hike in water supply and sewerage service tariffs by Rīgas Ūdens, a utility company, as of June 1.
The average annual inflation in the first half of the year has been 2.2%. Taking into account various factors that could contribute to rising annual inflation in the months to come, e.g. those linked with the oil price, average annual inflation could be between 2.5% and 3.0% this year.
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