Macroeconomic Forecast Lithuania

June 2008 | Macroeconomic Forecasts

Consumer price inflation reached 12% y-o-y in May and is likely to average at least 10% in 2008 compared to 5.7% in 2007. There are a number of factors behind the sharp increase in inflation. Gas prices for households increased by more than 60% at the start of the year while "agflation" has been particularly strong because of the importance of food in the consumer basket (the weight given to food in the CPI is 26%). Prices are also under pressure from local factors, including rising unit labour costs and excise tax hikes (delivered in January and March).

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