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Thursday, March 27, 2008

Latvia Producer Prices February 2008

Producer prices in Latvian industry rose by 1.7% month on month in February, according to data from the Latvian Central Statistical Bureau. Year on year producer prices increased by 11.4% over February 2007. On the monthly basis, the biggest increase was in tariffs for electricity, gas, steam and hot water supply (by 0.6 percentage points). The rise in prices for the manufacture of basic metals increased the overall level of producer prices by 0.5 percentage points, while the manufacture of food products and beverages was responsible for 0.4 percentage points. However, there was a decrease (by 0.3 percentage points) in the price of manufacture of wood and wood products (except furniture).

In annual terms the manufacture of food products and beverages made the biggest impact on the overall level of producer prices, increasing by 4.7 percentage points. The increase of the tariffs of electricity, gas, steam and hot water supply raised the overall price level by 1.7 percentage points.

Prices in the export sector were up 5.7% year on year, and 1.5% month on month. This last detail is important, because it should be noted in the chart above that both total producer prices and prices in the export sector alone have both - hopefully only temporarily - ceased their downward march in terms of year on year rates of increase. Like this it will be hard to sustain export competitiveness.

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