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Country Report Lithuania Product Image

Country Report Lithuania

  • Published: July 2014
  • Region: Lithuania
  • 25 Pages
  • The Economist Intelligence Unit

In June consumer prices rose by 0.3% month on month (seasonally adjusted), following a 0.2% fall in May. Year-on-year prices rose by 0.2% (non-seasonally adjusted).

Year-on-year consumer price inflation has fallen by 1 percentage point over the 12-month period. In its 2014 Convergence Report, published on June 4th, the European Central Bank (ECB) gave the green light for Lithuania's adoption of the euro in January 2015, concluding that the country had comfortably fulfilled all compliance criteria, including on inflation. On July 16th the European Parliament voted with a large majority to approve Lithuania's accession to the euro zone.

At 0.4%, Lithuania's 12-month averaged harmonised index of consumer prices (HICP) is half of the euro zone average, higher than only Cyprus, Greece, Latvia and Portugal. Nevertheless, on entering the single currency Lithuania is likely to join Germany in taking a hawkish line on further loosening of monetary policy by the ECB. As a small, export-oriented economy, maintaining price competitiveness is likely to be of greater concern to Lithuanian policymakers than boosting domestic demand. This is particularly the case given the painful readjustments READ MORE >

Country Report Lithuania

Inflation remains weak
Impact on the forecast

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