1. Flash comment: Lithuania
Economic commentary by Economic Research Department May 9, 2012
Prices increased by 0.6% in April, in line with our expectations
Contribution to annual CPI growth, pp As expected, inflationary tendencies continued in April. Consumer
14 prices grew by 0.6% on a monthly basis, resulting in annual 3.2%
12 inflation. The average consumer price inflation decreased by 0.1
10 percentage point to 4.1% and is likely to decrease during the
8 coming months.
6
4 Inflation in April was mostly effected by 3.9% growth in clothing and
2
footwear prices due to new spring and summer collections, which
0
-2
contributed 27% to the overall monthly inflation; and 1.4% increase
in prices for transport goods and services (esp. petrol, liquid
2007 2008 2009 2010 2011 2012
petroleum gas and air transport services), which had 16%
Food Trans ports Housing
Others CPI growth contribution.
Source: Statistics Lithuania, Sw edbank
Overall prices index was also influenced by 0.6% increase in food
prices (esp. milk, eggs, vegetables and potatoes). Inflation was
Consumer and producer prices partly offset by 0.9% decrease in prices of communication.
16% 4%
In April, compared with March, producer prices declined by 0.2%.
12% 3%
8% 2% However prices of products sold in Lithuanian market were 0.3%
4% 1% higher. Meanwhile, the average annual producer price inflation
0% 0% reached the peak (14.5%) at the end of last year; it edged down to
-4% -1%
11.4% in April and is likely to continue on the downwards path
-8% -2%
-12% -3% during the rest of this year.
-16% -4%
2009 2010 2011 2012f Outlook
Monthly inflation (rs)
Annual inflation (ls) As the price of oil dropped significantly during recent weeks and
Producer prices to Lithuanian market, yoy (ls)
Source: Statistics Lithuania
domestic factors remain muted, inflationary pressures are expected
to ebb somewhat. During the rest of this year we expected much
slower monthly inflation and some deflation during summer months.
CPI and inflation expectations
14 105 We forecast consumer prices to increase by 2.8% on average this
12 90 year and be the main hurdle to meeting Maastricht criteria.
10 75
8 60
6 45
4 30
2 15
Lina Vrubliauskienė
0 0
-2 -15
Senior Economist
+ 370 5 258 2275
2006 2007 2008 2009 2010 2011 2012
lina.vrubliauskiene@swedbank.lt
CPI, % yoy (ls)
Cons um ers inflation expectation (rs)
Source: Statistics Lithuania
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reliable sources and methods in the preparation of the analyses reported in this publication.
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