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Country Report Lithuania Product Image

Country Report Lithuania

  • ID: 2138679
  • November 2014
  • Region: Lithuania
  • 25 Pages
  • The Economist Intelligence Unit

The subdued inflationary trend continued in October, as both annual and month-on-month consumer price inflation rose by 0.1% after a minor contraction in consumer prices in September, according to Statistics Lithuania. The 12-month moving average of inflation now stands at 0.2%, compared with 1.5% in October 2013.

The category exerting most downward pressure on year-on-year prices this month was transport, which decreased by 3.3%; and the housing and utilities category, which contracted by 0.8%, owing to lower gas prices and despite an 8.2% spike in heating charges. The main factor driving price growth was alcoholic beverages and tobacco, with the strongest annual price rise of 4%, in line with escalating excise duties, while food prices grew by a mere 0.6% (the slowest since June 2014).

The October figures demonstrate the impact of Russia's ban on EU food imports from August, which has led to oversupply throughout the bloc and falling agricultural prices. Dairy producers-and prices-have been amongst the hardest hit in Lithuania, leading the government to request EUR32m from the European Commission's compensation scheme to support its dairy sector. Meanwhile, lower electricity prices-mainly the result of the government's deal with Russia's Gazprom for a 20% cut in prices, effective from July 1st 2014-are also weighing on price growth.

Country Report Lithuania

Inflation remains remarkably low
Impact on the forecast

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