Lithuanian inflation maintains growth rate in November

Lithuanian inflation maintains growth rate in November
By bne IntelliNews December 10, 2017

The Lithuanian consumer price index (CPI) grew 4.4% y/y in November, maintaining the expansion rate seen the previous month, Statistics Lithuania said on December 8. 

The price growth in the tenth month extends the surge in the Lithuanian CPI, which is part of a phenomenon across Central Europe.

Lithuanian prices have now been inflationary in every month since January 2016, supported by rising household incomes and higher oil prices. The tightened labour market and the return of EU-funded investment are pushing significant demand-led price pressures in the Baltic state. 

In annual terms, prices increased in all segments. The headline CPI was driven by a 4.8% y/y increase in the prices of food and non-alcoholic beverages, 10.9% annual expansion in the prices of alcohol and tobacco products, and 4.5% annual price growth in the transport sector. Growth in prices in the utilities segment also contributed with an expansion of 2.3% y/y in November. 

Overall, prices of goods expanded 4% y/y in November, while services became 5.5% more expensive in annual terms. In monthly terms, CPI expanded 0.3%.

Inflation will come in at 4.2% in 2017, before easing to 3.3% in 2018, Swedbank predicts.

“Of course, a risk of sharp swings in commodity prices is present, but at least domestic pressures are easing,” Swedbank noted.