According to the forecasts of the Ministry of Finance, the average annual inflation in 2025 will be 2.2%, the agency LETA reported. In this year inflation will continue to be influenced by external, and internal factors. Minfin relates to external factors the increase in prices for food and cheaper energy resources, at least, at the first half of the year. The dynamics of prices for energy resources in the second half of the year will depend on the development of the world economy and geopolitical events.Among internal factors Minfin mentions the prices for services, which are likely>to decrease compared with the previous
years, though will remain relatively high. The increasing impact on inflation will also be increasing tax rates, in particular,
the excise on alcoholic beverages, tobacco products and fuels. As noted by the Ministry of Finance, consumer prices rose by 3.3 percent in December of last year compared to December of the previous year. The inflation rate increased gradually and in December was 2.4 percentage points higher than in January 2024 year. The most impact on inflation in December and in
2024 year was the increase in prices for foods foods. Although its rate and was significantly lower compared with 2022-2023, it remains one of the major factors of consumer price growth in total. In December of last year food and nonalcoholic beverages
were 5.5% more expensive than the year ear earlier. At total for the year prices for food and non-alcoholic beverages increased by 2.8 percent, which gave 0.7 percentage points of average annual inflation. According to Minfin, with the considering
that world prices for unprocessed food has resumed growth since September of last year, it is expected that food prices in Latvia will continue to increase above the average level of inflation. Last year inflation
was also significantly affected by prices for services, which were significantly driven by increases in wages. Although growth in wages is beginning to slow down, its pressure on the total expenditures of businesses will remain high and will continue to stimulate the growth in the price of services, which along with the increase in prices for food will determine
the average inflation in this year, Minfin forecasts. As reported, the annual inflation in Latvia last year was 1.3%. According to data from the Central Statistical Administration, in December 2024 year compared with November consumer prices in Latvia
increasedby0.2%,andannualinflationwas3.3%.