RIGA — While in Tallinn consumer goods prices are shooting up in anticipation of the euro, just a few hundred kilometers south in Riga prices continue to fall as Latvia struggles to recover from its worst post-independence recession.

While the -1.4 percent change in the consumer price index in June year-on-year is less than in earlier months, it shows that domestic demand among consumers is hardly rebounding despite the recent uptick in real estate prices after a massive plummet during the crisis.

In June the largest decrease in prices was for services, which are down 5 percent while the price of heating shot up 8.3 percent, according to the country’s central statistics bureau.

Latvia has the highest unemployment rate in the EU, Eurostat reported using first quarter results. Like the other two Baltic states, Latvia is positioning itself for an exports-based recovery with the government planning to invest heavily in the Port of Riga.

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