Producer prices rise at a slower rate than elsewhere
As the trend of the last six months continued, the producer price index continued to grow in June, with the monthly growth amounting to 0.8%, i.e. 6% higher than a year ago. This is evidence of an important pressure on consumer prices and counteracts the deflation trend. The rise in producer prices was substantially influenced by the prices of energy resources, which accounted for 0.9 percentage points of the overall monthly rise. It is expected that as the global oil prices stabilize, the effect of the rise in energy resource prices on producer prices will diminish in the near future. The price rise has been substantially slowed by the price drop in refuse management, i.e. 17.5% month-on-month.
The annual rise in producer prices was still more pronounced in exported goods, particularly wood pulp and metals, and these prices continued to rise also during the last month.
Observing that the growing costs of natural resources has effected a rise in prices all over the world, the continued drop in labour costs has led to a lower price rise in Latvia than in its trading partners. The competitiveness of enterprises in foreign markets thus continued to improve. The drop in the real effective exchange rate of the lats, which has been calculated on the basis of the producer price index, continued to increase and, according to the latest available data, was 10.3% lower in April than a year ago.