Flash comment: Lithuania - August 10, 2015
Prices dropped by 0.5% in July, deflation will continue
In July prices dropped by 0.5% compared with June, whereas annual deflation remained unchanged, also at 0.5%.

In July the consumer prices dropped mostly due to seasonal sales of clothes and footwear prices (-7.2%) and cheaper food products (-0.7%).

Goods in general are cheaper than a year ago due to lower commodity prices; however, prices of services have increased by 3.2% due to rising wages and some rounding up of prices after euro introduction.

Outlook: deflation will continue throughout this year

Producer prices in Lithuanian market in June were still by 8.6% lower than a year ago. Moreover, oil prices are expected to remain low throughout this year and, together with other cheap commodities and foodstuffs, will further make a downward pressure on consumer prices. We expect deflation to continue throughout this year, but recovering prices of commodities and, especially, rising wages will probably push next year’s inflation above 2%.

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

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