On Inflation in March 2009

In March, inflation rate was considerably affected by a slowdown in economic activity, including a rapidly shrinking demand. Though the average price level increased by 0.2% over February, partly on account of seasonal factors, the inflation rise for the month was lower than the 1.5% recorded in March of the previous year. Thus, annual inflation continued on its downward path to stand at 8.2%.

In March, month-on-month increase was largely determined by the increase of patient fees and the end of the traditional discount season. This year, considering the steep decline of demand and tightening competition, the seasonal effect on price increase has been less pronounced, since sales discounts continue to be broad-based, while the new collections have been priced more moderately.

A month-on-month deflation is expected as of April: a drop in household income will further push down the demand, resulting in a growing competition among retailers. A decline in administered energy prices is anticipated already as of May, expected to bring down costs and allow companies to reduce their prices even more.

APA: Kalnbērziņa, K. (2022, 27. may.). On Inflation in March 2009. Taken from https://www.macroeconomics.lv/node/2542
MLA: Kalnbērziņa, Krista. "On Inflation in March 2009" www.macroeconomics.lv. Tīmeklis. 27.05.2022. <https://www.macroeconomics.lv/node/2542>.

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