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Monday, June 9, 2008

Latvia Inflation May 2008

Latvian inflation accelerated again in May, with the annual inflation rate rising to 17.9 percent, the highest in the 27-nation EU. Bulgaria currently has the second-highest rate, at 14.6 percent.

The already strong rate of consumer-price growth has been further boosted by rising energy costs and food prices. Despite the fact that activity is slowing - Latvia's economy expanded a revised 3.3 percent in the first quarter, compared with 8 percent in the previous three-month period - inflation continues unabated. Food prices, the biggest item in the consumer basket, rose an annual 21.6 percent, but other areas like education (20.5%) and hotels and catering (23.2%) are going up at a rapid clip, and there is no short term sign of all this abating.

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