Consumer price level remains lower than a year ago

The consumer price rise by 0.3% month-on-month in September is the result of seasonal factors, as autumn/winter wearing apparel and footwear collections hit the shops after the end of summer sales. The month-on-month price rise was lower overall than a year ago when there was an additional rise in fuel prices and that is why the annual inflation level in September remained in the minuses (-0.4%).

The price fluctuations of those goods and services that characteristically are affected by seasonal factors were very typical in September: the prices of some services related to tourist activities dropped (e.g., accommodation services by 7.3% and tourism services by 6.2%), as did potato prices, whereas the prices of wearing apparel and footwear grew (by 5.6%).

The impact of gradually growing purchasing power is evidenced by a slight year-on-year rise in unregulated service prices (e.g., the prices of  personal care as well as recreation and cultural services), as well as the reduced negative contribution of so-called other tradable goods in the annual inflation.

The global oil prices have dropped slightly since mid-September and currently a corresponding trend is observed also in fuel prices. They will be reflected in the October inflation indicator. The prices of domestically produced energy resources will likewise have an inflation-lowering effect in the coming months because in October and December and possibly even in January several cities are expecting a drop in thermal energy prices (e.g., in Cēsis, Jūrmala, Liepāja, Daugavpils).

The drop in the prices of energy resources and the currently favourable global food prices dynamic will to a great extent compensate the impact of other factors, including demand, on inflation, therefore in the coming months, inflation will continue to be untypically low for a growing economy.