The Bank of Latvia increased inflation forecasts to this year to 3.4% / day
Meanwhile, for 2026, the annual average inflation forecast increased from 1.5% to 2.1% forecasted last December, while 2027 annual inflation forecasts increased from 2.1% to 2.8%.
The Bank of Latvia reported that increasing the inflation forecast to 3.4% was faster than previously predicted to increase the prices of food and services.
At the same time, the Bank of Latvia expects to be 3.2%in Latvia in 2025, without including food and energy prices, but in 2026 and also in 2027 – 2.4%.
The Bank of Latvia also noted that inflation in the eurozone has diminished and is currently about 2% at the average level target. The overall inflation of the European Central Bank (ECB) in the eurozone in 2025 will be 2%on average, 1.6%in 2026 and 2%in 2027.
Successful inflation limitation has allowed the ECB Council to continue to reduce the main euro interest rates. Among them, on June 5, the ECB Council decided to lower three main interest rates by 0.25 percentage points. Night deposits, interest rate, interest rate on refinancing operations and loan options overnight interest rate were reduced to 2%, 2.15%and 2.4%respectively.
