Latvian Producer Prices March 2008

Compared to February 2008, Latvian producer prices were up in March by 0.6%, according to data from the Central Statistical Bureau of Latvia. Over the year (ie compared to March 2007) producer prices have increased by 10.5%. As we can see from the chart below producer prices had been falling, but the rate of increase has now remained stubbornly flat since the end of last year. This is not good news, and especially not in the export sector, where - if you they to maintain the euro-lat peg - they need negative price increases over a period of time to restore lost competitiveness.




According to the statistics office:

Compared to February, the overall level of producer prices in March 2008 was mostly effected (by 0.4 percentage points in each activity) by the increase of the tariffs of electricity, gas, steam and hot water supply (mostly in the steam and hot water supply and in the distribution of gaseous fuels) and by the price rise in the manufacture of basic metals. However, the price decrease in the manufacture of food products and beverages (mainly in the manufacture of dairy products and cheese), in the manufacture of fabricated metal products, except machinery and equipment, in the manufacture of furniture; manufacturing n.e.c. lowered the overall level of producer prices by 0.1 percentage point in each activity.


Over the year the price increase in the manufacture of food products and beverages left the biggest impact on the overall level of producer prices, increasing it by 4.3 percentage points. The increase of the tariffs of electricity, gas, steam and hot water supply raised the overall price level by 2.0 percentage points. The price rose in the manufacture of furniture; manufacture n.e.c. increased the overall price level by 0.7 percentage points, in publishing, printing and reproduction of recorded media, in the manufacture of other non-metallic mineral products, as well as in the manufacture of basic metals – by 0.5 percentage points in each activity.