Bloomberg News

Latvia’s Inflation Rate Drops to Lowest Level in 16 Months

May 10, 2012

Latvian consumer prices grew at the slowest pace in 16 months in April as health care and clothing costs fell.

The inflation rate dropped to 2.8 percent from 3.3 percent the previous month, the statistics office, based in the capital, Riga, said today on its website. Prices rose 0.6 percent from March.

The Baltic country plans to cut its value-added tax, a sales levy, by 1 percentage point in July to slow inflation as the government seeks to qualify for euro adoption in 2014, Finance Minister Andris Vilks said last month.

Countries seeking to adopt the euro must keep inflation at less than 1.5 percentage points above the average of the three lowest levels in the EU. Latvia’s 12-month consumer-price index was 4.1 percent in March, according to Eurostat. The threshold for the currency changeover was 3.1 percent.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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