Flash comment: Lithuania - April 10, 2017
Annual inflation accelerated to 3.1% and will not ease

Annual consumer price growth accelerated to 3.1% in March, while average annual inflation picked up to 1.4%. Monthly inflation spike was caused by higher excise duties, which increased the prices of alcohol. Higher alcohol and fuel prices also contributed the most to annual inflation. Prices of goods rose 3.3% in a year, while price of services were 2.7% higher than a year ago. Decreasing prices of travel services and still cheaper compared with a year ago heating and electricity contributed negatively to inflation.

Strengthening price pressures

Prices of goods will rebound this year following the changing trends in the commodity markets despite shrinking base effects from oil price in the second half of this year. Growth of prices of services will accelerate as well due to strong wage growth and domestic demand. We expect average annual inflation to accelerate from 0.9% last year to 3.0% this year and to ease slightly 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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