Macroeconomic Forecast Lithuania

Consumer price inflation in Lithuania took another leg down in August, coming in at 2.6% y-o-y, down from 3.0% y-o-y and 4.2% in July and June, respectively. With Vilnius having hitherto remained adamant that it will not devalue the lita against the euro, and instead opt to correct the Baltic economy's wide external asymmetries through an unprecedented nominal devaluation, we expect consumer price inflation to remain subdued through the medium term. We forecast consumer price inflation coming in at 0.2% by end-year.

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