Monday, November 09, 2009

Latvia Has First Case Of Price Deflation

For the first time since Latvia became independent from the Soviet Union in 1991, Latvia saw consumer prices fall in the year to October. It should be noted that this would have probably come earlier if they hadn't increased the VAT and other consumption taxes in January. The rate of deflation will probably accelerate further in coming months.

Similarly, Estonia saw its rate of deflation increase and Lithuania saw its rate of inflation drop sharply, even as the euro area and most other countries saw their inflation rate move in the other direction.