Macroeconomic Forecast Lithuania

Consumer price inflation in Lithuania took a slight leg down in December, with the headline print coming in at 1.3% y-o-y, compared to 1.5% in November. While significant deflation was recorded in the food and utilities components of the consumer price basket (with prices contracting by 4.4% y-o-y and 5.6% respectively), the ongoing rally in global commodity prices pushed transport price inflation to 10.5% y-o-y. Going forward, we believe Lithuania's ongoing recession will push prices into deflation by H110, and project inflation coming in at -0.6% by end-year.

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