Global price rises abate, will act to slow down inflation in Latvia
Producer prices dropped for a second consecutive month compared to the previous month. In October the drop was accounted for by the producer prices of goods sold domestically, whereas in November it was primarily the prices of exported production, with the prices of domestically sold goods remaining rather stable, i.e., month-on-month, they rose only 0.1%. Overall, producer prices in November were 8.2% higher year-on-year.
According to the latest data, the influence of global price rises that have had a substantial effect on prices in Latvia is beginning to abate. It is also expected to alleviate the pressure on the rise of Latvian consumer goods. Most substantially - for the first time this year - the prices of wood pulp and metal manufacturing dropped in November while their 12-month rise was 12.3% and 41.1% respectively. It is obvious, however, that the rise in food prices that has had a substantial effect on consumer price dynamics has diminished quickly, at only 0.2% month-on-month.
The slowing down of price rises is expected to continue in the next few months and the new year may start with a drop in the producer prices of goods sold domestically. Consumer prices, on the other hand, will grow as a result of the rise in value-added rates. According to the predictions of "Latvijas Gāze" enterprise, the trade prices of natural gas will drop in January thus bringing down both the natural gas tariffs and household heating tariffs.