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Monday, May 12, 2008

Latvia Inflation April 2008

Well when it rains it really rains! Following close on the back of the news that Latvia's first quarter growth marked a strong slowdown, we now have Latvia's April inflation rate, which showed another strong uptick and rose to the highest level in nearly 12 years.

According to Latvijas Statistika the inflation rate, which is the highest in the 27-nation European Union, rose to 17.5 percent in April from 16.8 percent in March. Month on month, consumer prices rose 1.5 percent over March, the same level as registered in the previous month.

Electricity prices grew 39.2 percent in April on the month adding the most to inflation, the statistics office said. Food prices, which make up about a quarter of the consumer-price basket, rose about 20.8 percent from a year ago.

This now has all the signs of a very hard landing indeed scenario, with Latvia trapped in the vice of a pretty vicious form of what is generally known as stagflation.

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