Inflation will accelerate in the coming months of this year — annual inflation is expected to be 1.1% in August and 1.5% in September, representatives of the Finance Ministry told LETA. This will be due to both basic effects and a steady increase in prices for food and services, the Finance Ministry representatives explain. According to the Central Statistical Bureau (CSB), in July of this year, the price level was 0.1% higher than in June, and compared to July last year, prices increased by 0.7%. Such growth in consumer prices was the lowest in the eurozone and one of the lowest among all EU member states, the Finance Ministry emphasizes. In July 2023, annual inflation in Latvia was 1.4%, now it is 0.7%, the CSB emphasizes. According to the operational assessment of Eurostat, the harmonized index of consumer prices in the eurozone in July 2024 increased by 2.6% compared to the same month last year. The Ministry of Finance explains that both in Latvia and in the euro area as a whole, the growth of consumer prices is due to the increase in food and service prices, while energy prices, reflecting changes in electricity, gas and heating tariffs, are decreasing. The Ministry of Finance emphasizes that in Latvia, the decrease in energy prices has a significantly stronger impact on inflation than in the euro area, which is largely due to base effects, as the increase in electricity, gas and heating tariffs in 2022-2023 was one of the fastest in the euro area. The Ministry of Finance considers the growth of consumer prices in Latvia in July of this year to be moderate. Although deflation was recorded in some product groups, a strong increase in service prices and a steady increase in food and fuel prices led to an increase in consumer prices. In July of this year, service prices increased by an average of 5.1% year-on-year, while product prices decreased by 0.8%. In the food and non-alcoholic beverages group, prices increased by 2.4% over the year. The most expensive items over the year were coffee (+6.5%), olive oil (+37.9%) and confectionery (+5.6%). Fruit and vegetable juices (+12.9%), potatoes (+14.5%), cheese and cottage cheese (+3.1%), sweets (+18.2%), chocolate (+6.8%) and butter (+8.7%) became more expensive. Prices also increased for canned or processed fish and seafood (+10.1%), poultry (+2.2%) and dried, salted or smoked meat (+1.3%). In turn, flour and cereals (-9.9%), sugar (-14.6%), eggs (-4.6%) and dairy products (2.5%) became cheaper. Prices for alcoholic beverages and tobacco products increased by 7.2% on average. The average price level for housing-related goods and services decreased by 11.3% compared to the previous year. The most significant decreases over the year were in prices for electricity (-31.2%) and heating (-14.8%). Prices also decreased for solid fuel (-8.3%) and natural gas (-7.6%), but prices increased for housing management services (+7.5%), rent (+8.1%), garbage collection (+13.1%), water supply (+5.8%), and housing maintenance and repair services (+5.1%). The cost of medical services increased by 5.2%. Visits to the dentist and other specialized doctors, laboratory tests, and X-rays became more expensive. Prices for transport-related goods and services increased by 3.8% compared to the previous year, which was due to a 6% increase in fuel prices. Diesel fuel has increased in price by 8.6%, gasoline by 3.8%, and automobile gas by 0.2%. Also, prices for maintenance and repair of personal vehicles, automobile and railway passenger transport have increased over the year. Prices have decreased for passenger air transportation and used cars. Computers have become cheaper over the year, but flowers and household chemicals for the home have become more expensive.
