Latvia's inflationary spiral continued in April, reaching a 12-year high of 17.5 percent after a sudden surge in electricity prices, the statistics agency announced Monday.
It was 11th straight month that consumer prices have risen in the Baltic country, which continues to have the highest inflation in the 27-member European Union.
A new set of household and industrial electricity rates that went into effect at the beginning of April resulted in a 6.8 percent jump in housing-related costs for the month, the agency said.
Compared to a year ago, prices for goods have climbed 17.6 percent and those for services 17.3 percent. Food prices alone have skyrocketed 20.8 percent over the last 12 months, according to Statistics Latvia.
The runaway inflation has taken a chunk out of Latvians' purchasing power and triggered the first signals of an economic downturn. The statistics agency recently announced that retail sales fell 3.4 percent over the first quarter of 2008.
What's more, on Friday the agency announced that first quarter GDP growth was 3.6 percent, below economists' forecasts and indicating that the country may be in for a so-called hard economic landing _ when robust GDP growth suddenly plummets to 2 percent or less.
Last year Latvia's economy grew 10.5 percent and in 2006 11.9 percent, both of which were the best in the EU.
Bulgaria has the second highest rate of inflation in the EU after the consumer price index posted an annual 14.2 percent rise as of March.
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