When compared to June, consumer prices in Latvia increased by 0.4-0.5% in July. This means inflation might have reached 2.9% in July when compared to the same month of 2020, according to bank analysts.
Swedbank economist Laura Orleane predicts consumer prices will have increased by 0.4% and annual inflation will have reached 2.9% in July when compared to June.
She said in July consumer price rise were caused by growing oil prices.
“As usual, fuel prices were one of the driving forces behind inflation. They reflect the world price growth with a delay. There is also the increase of gas tariffs, followed by oil prices observed in the last nine months and increased housing maintenance costs,” said Orleane, adding that electricity and heating energy tariffs were expected to increase soon.
She also said upward pressure on average price levels was exacted by services sectors after certain restrictions were lifted due to increase demand.
SEB Bank macroeconomics expert Dainis Gaspuitis predicts that at the beginning of July consumer prices may have increased by 0.5% when compared to June, with inflation reaching 2.9%.
“Inflation continued reaching for new heights in July. It was dictated by energy price increase. The effect of rising energy prices will appear in autumn again. The increase was slightly slowed by seasonal factors, as well as prices of food products, clothes and footwear. Food product prices may have increased considerably,” said Gaspuitis, adding that prices might continue increasing for services.
He added that seasonal factors would remain active in August. (BNN/Business World Magazine)