Flash comment: Lithuania - September 8, 2016
Annual inflation accelerated to 0.8% in August

 

Annual consumer price growth accelerated to 0.8% in August, while average annual inflation picked up to 0.4%. Higher prices of lottery tickets, restaurant services, tobacco products and vegetables  contributed most to annual inflation, while the largest drag came from cheaper fuel, communication services, electricity, heating and gas.


As a result of cheaper commodities, prices of goods continued shrinking and were 0.2% lower than a year ago. Meanwhile, the prices of services remained on an upward trend and were 4% higher than last year, largely due to rapidly growing wages.

Outlook: faster price growth next year

We forecast the divergence between prices of goods and services to continue. However, prices of goods will start increasing and will push annual inflation higher towards the end of this year and even more so next year. We expect average annual inflation to reach 1.2% this year and 3.0% next year.


 

For more information about this report, please contact Mrs. Laura Galdikienė, +370 5 258 2275, Laura.Galdikiene@swedbank.lt

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