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Flash comment: Lithuania - September 10, 2012


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Flash comment: Lithuania - September 10, 2012:Unexpectedly, prices increase by 0.2% in August

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Flash comment: Lithuania - September 10, 2012

  1. 1. Flash comment: Lithuania Economic commentary by Economic Research Department September 10, 2012 Unexpectedly, prices increase by 0.2% in August Contribution to annual CPI growth, pp Somewhat unexpectedly, prices increased by 0.2 percent in August 6 and were 3.3 percent higher than a year ago. Despite slight decline in prices at the beginning of the summer, annual inflation has been 4 increasing for three months now. In August, average annual inflation remained unchanged at 3.5 percent. 2 The major factor behind price increases was more expensive oil 0 and cheaper euro, which caused a spike in fuel prices. Fuel and oil prices have contributed 0.274 percentage points to monthly -2 inflation. The second reason was more expensive clothes and 2010 2011 2012 footwear, as new collections reached the stores. Finally, a more Food Transports Hous ing Others CPI growth expensive public transport had 0.014 percentage point contribution Source: Statis tics Lithuania, Swedbank to inflation (mainly due to steep increase of prices of public transport in Vilnius). Annual, monthly and average annual Outlook change in prices, % Somewhat stronger euro and more stable prices will have a positive effect and we do not expect rapid inflation during the 6% 1.50% remaining months of this year. However, unfavorable weather 1.25% conditions in U.S. and some other countries are pushing the price 4% 1.00% of corn, soy beans and other food products to record highs, which 0.75% will contribute to inflationary pressures in Lithuania. We forecast 2% 0.50% 0.25% that average annual inflation will continue trending downwards to 0% 0.00% 3.0%, but going much lower below this level is less likely. -0.25% -2% -0.50% 2010 2011 2012 Monthly growth (rs) Annual growth (ls ) Average annual (ls) Source: Statistics Lithuania Nerijus Mačiulis Chief Economist + 370 5 258 2237 nerijus.maciulis@swedbank.ltSwedbank Economic Research Department Flash comment is published as a service to our customers. We believe that we have used reliable sources and methods in the preparation of the analyses reported in this publication.SE-105 34 Stockholm, Sweden However, we cannot guarantee the accuracy or completeness of the report and cannot held responsible for any error or omission in the underlying material or its use. Readers encouraged to base any (investment) decisions on other material as well. Neither Swedbank nor its employees may be held responsible for losses or damages, direct orLegally responsible publisher indirect, owing to any errors or omissions in Flash comment.Cecilia Hermansson, +46 8 5859 7720