According to the Central Statistical Bureau, consumer price levels in September 2024 rose by 0.3% compared with August. Prices for goods rose by 0.4%, while prices for services fell by 0.1%.
September is typically a month of rising prices, usually driven by increases in the price of clothing and footwear as new seasonal stock goes on sale. This September saw the price changes typical of the month, and the largest upward contribution came from the rise in clothing and footwear prices, although this was the slowest September increase for clothing and footwear since 2000. Over the month, clothing and footwear prices rose by 3.4%, contributing 0.2 percentage points to the overall rise in consumer prices.
Food prices rose more sharply this September than is typical for the month – by 0.7%, which added 0.2 percentage points to the overall price level. The largest contribution came from price rises for fresh vegetables and fresh fruit, which have rarely seen such a sharp increase in this month in the past.
It should be noted that global food prices rose sharply in September – by 3%, the largest monthly increase since March 2022; over the year, compared with September 2023, they were up by 2.1%. Price indices for all the main food groups rose in September. The sharpest September increase was in the sugar price index, driven by the deteriorating harvest outlook for the 2024/2025 season in Brazil and the Indian government's decision to lift restrictions on the use of sugar cane in ethanol production. Similar index increases in September were recorded for vegetable oils, dairy products and cereals. The vegetable oil price index rose for the fourth consecutive month, reaching its highest level since the start of 2023, mainly because output was lower than expected and because of concerns about a forthcoming fall in production in the largest producer countries.
The dairy price index continued to rise in September across all types of dairy product, with the largest increase in whole milk powder prices, driven by strong import demand in Asia despite seasonally higher milk production in Oceania. Prices for skimmed milk powder, butter and cheese rose on the back of increased demand and limited supply in Western Europe, where milk production is seasonally lower. After three consecutive months of decline, wheat prices rose in September, mainly on concerns about unfavourable weather in some key exporting countries, although a sharper increase was held back by competitively priced supplies from the Black Sea region. The slowest September price rise, meanwhile, was for meat, driven by higher poultry prices as import demand for poultry from Brazil increased following the easing of trade restrictions related to Newcastle disease. Beef and pork prices were practically unchanged, with global supply covering rising demand, while sheep meat prices fell slightly on weak import demand from China.
With promotions coming to an end, there was also a notable price rise for personal hygiene products and cosmetics, of 6.2%, which added 0.1 percentage points to the overall price level.
The largest downward contribution in September came from the 4.8% fall in fuel prices, which reduced the overall consumer price level by 0.3 percentage points. Prices fell more sharply for petrol, but the contribution was similar for both the fall in diesel prices and the fall in petrol prices.
The average monthly price of Brent crude also fell in September compared with August – by 8% – while at the end of September, compared with the end of August, the price of Brent crude was down by 9%. In the first half of the month it slipped to around 69 US dollars per barrel, its lowest level since the beginning of December 2021. This was mainly driven by signs of a possible increase in oil supply on the market, with Saudi Arabia announcing an increase in production from December, as well as the expected resumption of oil extraction in Libya as the government settles its internal disputes. Concerns about demand also persist in China, despite recent monetary measures aimed at boosting activity and energy demand in the world's largest oil importer. Tensions in the Middle East nevertheless continue to escalate, which may affect the trajectory of oil prices in the months ahead.
It should be noted that prices for services fell in September after nine consecutive months of increases. The fall was small, however – 0.1%, which the overall consumer price level. In the services sector, the largest downward contribution in September came from falling prices for passenger transport by air, by road and by sea, with the largest contribution from the fall in passenger air transport prices. Falling prices for accommodation services also had a considerable effect. Prices rose substantially, on the other hand, for recreational and cultural services and for higher education, outpatient services and waste collection.
In September 2024, consumer prices rose by 1.4% compared with September of the previous year. Average annual inflation was 0.9%.
Going forward, the main influence on price changes will continue to be linked to fluctuations in global energy and food prices, as well as being determined by global developments. At the same time, inflation in Latvia is affected by various supply-side factors relating to the review of taxes and tariffs, and by the demand side, driven by rising wages. Overall, average annual inflation in 2024 is expected to be in the range of 1-1.5%.
https://www.em.gov.lv/lv/jaunums/septembri-verojamas-menesim-raksturigas-cenu-parmainas