Latvia Economic and Defence Update

S 01.01.2005 2022: 17.2% 20 2023: 7.9% GLOBAL ENERGY AND FOOD PRESSURES PUSH UP INFLATION Larger share of food and energy in consumption basket and quicker pass-through to consumer prices elevates inflation; no material harm on competitiveness expected in medium term Inflation (HICP; year on year; %) and contribution to changes (percentage points) CPI forecast by European Commission: 80 Energy and food prices in LV and EA (year on year; %) Wages Oil 15 10 5 Global food Natural gas Electricity Heating energy Solid fuels Other factor Headline inflation 01.01.2006 01.01.2007 01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013 01.01.2014 01.01.2015 01.01.2016 01.01.2017 01.01.2018 21 Source: Eurostat; Latvijas Banka staff estimation 01.01.2019 01.01.2020 01.01.2021 01.01.2022 01.01.2023 01.01.2024 0 70 60 60 50 40 40 30 30 20 20 10 2021M08 2021M09 2021M10 2021M11 Source: Eurostat 2021M12 2022M01 2022M02 EA_Food 2022M03 2022M04 EA_Energy 2022M05 2022M06 2022M07 2022M08 LV_Food 2022M09 2022M10 2022M11 2022M12 2023M01 ⚫LV_Energy

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