In January, Latvia experienced a decrease in annual inflation to 2.9%, a significant shift influenced primarily by food and non-alcoholic beverage prices, which contributed 1.0 percentage points to the overall inflation rate. Key contributors to this surge included prices for coffee, fresh, chilled, or frozen chicken meat, and various housing-related costs, including water, electricity, and gas. Personal care, social protection, and a range of goods and services also impacted inflation, although transportation costs had a negative effect, reducing inflation by 0.3 percentage points.

Within the food and non-alcoholic beverages category, prices rose by 3.9% over the year, with coffee and chicken meat seeing some of the highest increases at 20.9% and 14.3% respectively. Other significant price hikes were observed in eggs (+17.2%), fresh or chilled fruits and vegetables (+11.9%), chocolate (+12.2%), and bread (+3.2%). Additionally, there were notable increases in various milled bakery products and dried, salted, or smoked fish, which rose by 24.1%.

The overall trends indicate that heating prices are playing a crucial role in shaping inflation in Latvia, alongside staple food items, which significantly affect household spending. As heating costs remain a substantial factor in the local economy, the interplay between these prices and overall inflation will be critical for consumers and policymakers alike, potentially influencing future economic decisions.