flash comment: latvia - march 8, 2013
TRANSCRIPT
-
7/29/2019 Flash comment: Latvia - March 8, 2013
1/1
Flash comment: LatviaEconomic commentary by Economic Research Department March 8, 2013
Consumer price inflation continues retreating
Consumer price growth, %
-2
-1
0
1
2
-8
-4
0
4
8
2010 2011 2012 2013
CPI, mom (rs) Goods, yoy
Services, yoy Source: CSBL
Contribution to CPI annual growth, pp
-6
-4
-2
0
2
4
6
2010 2011 2012 2013
Food Transport
Housing Other
Total, yoy growth Source: CSBL
Consumer inflation expectations andCPI growth, points
-15
-10
-5
0
5
10
15
20
-60
-40
-20
0
20
40
60
80
2008 2009 2010 2011 2012 2013
Retail, over the next 3MServices, over the next 3MConsumers, over the next 12MCPI growth, YoY (rs) Source: Reuters
Consumer prices continue to surprise on the downside. In February2013, Latvian consumer price index (CPI) fell by 0.1% in comparison to
the previous month. Monthly deflation is not a usual thing for February;
last time it was observed in February 2002. This time it was mostly
influenced by a fall in food prices, particularly meat. A decline in heating
tariffs also contributed to monthly deflation, but it was largely offset by an
increase in fuel prices.
In February, consumer prices were just 0.3% higher than a year ago
(down from 0.6% in January). Annual deflation was observed in clothing
and footwear (-1%), household equipment (-2.2%), transport (-0.8%),
communications (-6.7%), and education (-1.1%). Food prices were by
1.8% and housing by 0.9% higher than a year ago.
12-month-average annual inflation was 1.8% in February, thus Latvia
continues to fulfil Maastricht price stability criterion.
Outlook
We do not expect a pickup in food and fuel prices in the coming months
global food prices have stabilized; oil prices have retreated somewhat
during the last month. Housing tariffs are also anticipated to remain
largely stable. Overall, we believe that annual consumer price growth will
remain marginally above 0% in the coming two months.
Current Swedbank forecast is 1.9% average annual consumer price
inflation in 2013; however, taking into account weaker-than-expected
price developments in the beginning of the year, average inflation islikely to be less than that.
Lija Strauna
Senior economist
+ 371 6 744 5875
Swedbank Economic Research Department
SE-105 34 Stockholm, [email protected]
Legally responsible publisherCecilia Hermansson, +46 8 5859 7720
Flash comment is published as a service to our customers. We believe that we have usedreliable sources and methods in the preparation of the analyses reported in this publication.However, we cannot guarantee the accuracy or completeness of the report and cannot be
held responsible for any error or omission in the underlying material or its use. Readers areencouraged to base any (investment) decisions on other material as well. NeitherSwedbank nor its employees may be held responsible for losses or damages, direct orindirect, owing to any errors or omissions in Flash comment.