April in Lithuania – 0.1% inflation

Supplemented with comments from economists

The monthly inflation was fixed after the 0.2% monthly deflation observed in March. At that time, annual inflation in March was zero, in summer it reached 0.7%.

Average annual inflation reached 3.7% in April.

Pharmaceutical products, restaurants, cafes and similar sudden public catering services, tobacco products, car, personal vehicle technical access and repair services, medical services price increase and decrease in the price of electricity, solid fuel, gas, and thermal energy were mainly responsible for the annual inflation.

The monthly inflation was mainly due to clothing, business, vacations, other, not elsewhere classified, financial services, other personal access devices, utensils and tools, tobacco products, fuel and lubricants, increase in the price of footwear and natural gas, heating energy, electricity addition

During the month, the prices of clothes and shoes increased by 3.4% due to the new spring and summer season collections. Clothes went up by 3.9%, footwear by 3%, cleaning by 1%.

The price change of various groups of goods and services (prices increased by 2.1%) was not classified elsewhere, financial services (9%), personal hygiene items (7.5%), electrical personal access devices (1.8%) and other personal an increase in the prices of access devices, supplies and tools (3.4%) and a decrease in the prices of children’s supplies (2.4%).

The prices of leisure and cultural goods and services increased by 1.2% during the month. The largest increase was in vacation travel (6.4%), sports and recreation contracts and equipment rental services (2.3%), information processing event equipment (2.3%), but the decrease was (2.6%), aisl, audiom and mgstam thing (1.5%) of the price.

The prices of food products and non-alcoholic beverages increased by 0.3%. The most expensive fruits and fresh juices, flour, fermented berries, chocolate and cocoa-based desserts, canned and steamed foods, sugar, but edible ice cream, fresh and frozen mushrooms, rusks, frozen fish, bread, and edible offals fell in price. The prices of some fruits and vegetables also changed: mainly the prices of lemons, sweet potatoes, sweet peppers, tomatoes, and Chinese cabbage increased, but the prices of mangoes, cucumbers, avocados, broccoli, and grapes decreased.

Prices of housing, water, electricity, gas and other fuel group goods and services decreased by 4.2% during the month. The prices of natural gas (27.1%), heating energy (8.6%), liquefied gas for food production (7.3%), electricity (1.9%) decreased the most, but building access and repair services increased (0 .5%) of prices.

Prices of consumer goods decreased by 2.2% during the year, prices of services increased by 5.7%, respectively decreased by 0.3% and grew by 0.8% during the month.

Prices administered by state and municipal institutions decreased by 5.4% during the year, market prices increased by 1%, respectively decreased by 3.3% and grew by 0.6% during the month.

Economists: low inflation is not surprising

Economists interviewed by BNS say that such inflation indicators are not surprising. Analysts predict that annual deflation of up to 1% or close to zero annual inflation may be reached.

SEB Bank’s economist Tadas Povilauskas claims that inflation in April was lower than the worst for this month.

Now, all seasonal factors are essentially outweighed by three factors. The main reason why monthly inflation was so low is essentially due to cheaper natural gas. This was not a very surprising thing, because it was the decision of VERT (State Energy Regulatory Council BNS) more than a month ago that the price of natural gas, depending on the amount consumed, may decrease by 2030%, according to BNS T. Povilauskas.

At that time, Citadele bank economist Aleksandras Izgorodins said that currently inflation in Lithuania is one of the lowest in the European Union (EU), this is because it is compared with one of the highest indicators in the Community recorded last year.

The main reason for the annual result is that we are still comparing inflation with a fairly high base from last year. This year, Lithuania has the highest annual inflation rate in Europe only because last year we had the highest one, A. Izgorodinas told BNS.

The economist added that inflation is supported most by those segments affected by tax changes.

The prices of restaurants, cafes, tobacco products and similar products had the biggest impact on the annual inflation, for which the excise duty and VAT increased (the tax rate of the BNS will increase). Otherwise, we would have a slight annual deflation, says A. Izgorodin.

We see a slight decrease in service inflation, which is positive, because service sector inflation is the biggest problem at the moment, he added.

A. Izgorodins says that there may be a small, up to 1% annual deflation in Lithuania.

A did not predict a large annual deflation in Lithuania. On the one hand, prices are now stabilizing and have started to stagnate, but I don’t see a big drop in prices because Lithuanian consumer expectations are growing fast enough. (…) Deflation will be very small, up to 1%, says A. Izgorodin.

At that time, T. Povilauskas does not expect deflation this year. According to him, annual inflation close to zero may be recorded.

We have close to zero year of inflation and we will probably not reach that year of deflation, but we will be close. We will discuss what will happen in May, because there is intrigue. For the time being in May, fuel prices have decreased somewhat. (…) May should not bring any change, we will have very similar numbers, said T. Povilauskas.

It appears that inflation (CPI) in Lithuania is comparable to other EU countries in April compared to 2023. in April, it was 0.4% and was the same as in March.

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