Latvia Inflation August 2007

Latvia's CPI inflation year on year in August reached 10.1% according to data out today from Latvijas Statistika. Since this was largely expected there is little more to add, it is however an extremely preoccupying number.

Here's the chart showing annualized rates by month:



and here's the chart for month on month changes, which doesn't really give much comfort, since while the August increase is not especially high, there is no clear evidence of trend. Since the whole phenomenon is being driven by wage push,we need to see some more evidence of trend in wage and salary growth, and some data on export prices and volumes would no be useful to see how GDP growth is likely to evolve.