Second Quarter Latvian Inflation

According to the Baltic Times:

Inflation at the producer level in Latvia continues unabated in the second quarter of 2007, increasing by 4.4 percent compared to the first quarter, and showing an increase of 17.8 percent year-on-year, according to Latvia’s Central Statistics Office.

The largest increase in costs from the first to second quarters of this year was in the production of non-metallic goods, registering an increase of 11.5 percent; next came water cleansing producer prices which rose by 6.1 percent, followed by rubber and plastic goods production prices up by 5.6 percent, and production prices for timber and timber products, except furniture, increasing by 5 percent. Producer prices declined in garment manufacturing and fur processing and painting as well as in the printing and sound recording industries by 2.2 percent and 0.8 percent, respectively.


Compared to May 2007, the overall month-on-month producer price level rose by 0.4 percent for June, while the year-on-year increase for the month was 17.7 percent. Compared to May 2007, the overall month-on-month producer price level for domestically sold goods grew by 0.9 percent but for goods exported to foreign markets a decline in producer prices of 0.2 percent was registered. The year-on-year increase in March at the producer price level for domestically sold goods reached 18.8 percent but for goods exported to foreign markets, by 16.1 percent.

This trend, whilst being fairly predictable, is rather depressing. But it is more or less as forecast in the BICEPS report.