Flash comment: Lithuania - August 8, 2017
Annual inflation accelerates again in July

Annual consumer price growth reached 3.9% in July. Meanwhile, the average annual inflation picked up to 2.3%. Higher prices of alcohol and tobacco (resulted by a hike in excise duties), dairy products, fuels and those of restaurant services contributed most to annual inflation. In a month prices declined by 0.3% mainly due to seasonal factors. Prices of pharmaceuticals and fuels declined compared with June as well.



Annual growth in the prices of goods accelerated to 3.3%, while that of services reached 5.5%, driven largely by rapid wage growth and strong demand. The annual core inflation, which excludes volatile energy and food components, reached 4.3% in July and was at the highest level in 8 years.



Price pressures will remain strong

Price pressures will remain strong throughout this year due to rapid wage growth, however, goods price growth might be subdued due to stronger euro and higher base for oil prices in the second half of this year. We expect the average annual inflation to be slightly above 3% this year and to ease to 2.5% in 2018.


For more information about this report, please contact Ms. Vaiva Šečkutė, +370 5 258 2156, Vaiva.Seckute@swedbank.lt

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