RIGA — Latvia’s deflation reached 4.2 percent in February compared with the same month last year, the national statistics agency announced Monday, its steepest annual fall since data were first recorded in the 1990s. By contrast, annual deflation was 3.1 percent in January.
Prices for goods fell 3.9 percent from February to February, Latvia Statistics said, while those for services were down 4.8 percent.
Even though average annual inflation continues to be [private_supervisor]in positive territory, 1.3 percent, the overall drop in consumer prices is in line with the government’s strategy of choosing international deflation over a currency devaluation as a means to restore competitiveness to the economy, which overheated after four years of exuberant growth.
Still, though the price of a liter of milk and the household heating bill have fallen over the year, most Latvians will find little solace in the price correction now that nearly one-fourth of every working-age adult is without a job.
Analysts have forecast that for 2010 deflation will amount to 3-4 percent given no further hikes in taxes.
Latvia Statistics said housing costs saw the most dramatic fall over the year, down 13.1 percent, while clothing prices dropped 8.6 percent over the same period. Meanwhile, health costs have soared over the past year, nearly 10 percent, as the government has cut back subsidies for the health care industries. [/private_supervisor] [private_subscription 1 month]in positive territory, 1.3 percent, the overall drop in consumer prices is in line with the government’s strategy of choosing international deflation over a currency devaluation as a means to restore competitiveness to the economy, which overheated after four years of exuberant growth.
Still, though the price of a liter of milk and the household heating bill have fallen over the year, most Latvians will find little solace in the price correction now that nearly one-fourth of every working-age adult is without a job.
Analysts have forecast that for 2010 deflation will amount to 3-4 percent given no further hikes in taxes.
Latvia Statistics said housing costs saw the most dramatic fall over the year, down 13.1 percent, while clothing prices dropped 8.6 percent over the same period. Meanwhile, health costs have soared over the past year, nearly 10 percent, as the government has cut back subsidies for the health care industries. [/private_subscription 1 month] [private_subscription 4 months]in positive territory, 1.3 percent, the overall drop in consumer prices is in line with the government’s strategy of choosing international deflation over a currency devaluation as a means to restore competitiveness to the economy, which overheated after four years of exuberant growth.
Still, though the price of a liter of milk and the household heating bill have fallen over the year, most Latvians will find little solace in the price correction now that nearly one-fourth of every working-age adult is without a job.
Analysts have forecast that for 2010 deflation will amount to 3-4 percent given no further hikes in taxes.
Latvia Statistics said housing costs saw the most dramatic fall over the year, down 13.1 percent, while clothing prices dropped 8.6 percent over the same period. Meanwhile, health costs have soared over the past year, nearly 10 percent, as the government has cut back subsidies for the health care industries. [/private_subscription 4 months] [private_subscription 1 year]in positive territory, 1.3 percent, the overall drop in consumer prices is in line with the government’s strategy of choosing international deflation over a currency devaluation as a means to restore competitiveness to the economy, which overheated after four years of exuberant growth.
Still, though the price of a liter of milk and the household heating bill have fallen over the year, most Latvians will find little solace in the price correction now that nearly one-fourth of every working-age adult is without a job.
Analysts have forecast that for 2010 deflation will amount to 3-4 percent given no further hikes in taxes.
Latvia Statistics said housing costs saw the most dramatic fall over the year, down 13.1 percent, while clothing prices dropped 8.6 percent over the same period. Meanwhile, health costs have soared over the past year, nearly 10 percent, as the government has cut back subsidies for the health care industries.[/private_subscription 1 year]
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