Latvia's July Inflation Rate Falls to Lowest in 22 Months

Latvian consumer prices grew at the slowest pace in 21 months in July as transport costs fell.

The inflation rate dropped to 1.7 percent from 1.9 percent in June, the statistics office, based in the capital, Riga, said today on its website today. That matched the median estimate of four economists in a Bloomberg survey. Prices fell 0.5 percent from the previous month.

The Baltic country cut its value-added tax, a sales levy, by 1 percentage point starting in July to slow inflation as the government seeks to join Europe’s single-currency area in 2014.

To adopt the euro, countries must keep inflation at less than 1.5 percentage points above the average of the three lowest levels in the 27-nation European Union. Latvia’s 12-month consumer-price index was 3.5 percent in June, according to Eurostat. The threshold for the currency changeover is 3 percent.

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