Flash comment: Latvia - CPI March 2020
Inflation 1.4% is twice less than a year before

  • Annual inflation 1.4% in March.
  • Prices of services grew faster than prices of goods.

Weaker price growth in March 2020 was a result of broad range of obstacles, e.g., falling price of Brent oil that resulted in lower price of fuel, reduced tariffs of housing related services or last year's reduction of excise tax rate for spirits. Transport and housing related services are not the main contributors to the annual inflation anymore.

If inflation of goods accounts 0.9% and is mainly determined by fuel prices, inflation of services still remain quite high. Likely, the services did not face weaker demand yet, therefore the prices grew by 2.7% on average.

Swedbank forecasts that the inflation will slow further, and in 2020 it might reach 0.5% on average.

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