Macroeconomic Forecast Lithuania

April 2007 | Macroeconomic Forecasts

The annual rate of consumer price inflation averaged 4.2% in the first two months of 2007, bringing the 12-month moving average to 3.9%. We expect inflation to climb higher during the course of the year, to 4.5% on average, owing to the ongoing adjustment and pass-through of natural gas prices, food price convergence, and a planned hike in excise duties. The balance of risk remains to the upside, however, given the confluence of strong domestic demand and emerging bottlenecks in the labour market (which is pushing up wages), as well as the possibility of global geopolitical tensions keeping oil prices

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