For the first time in a year and a half, statisticians in Lithuania have recorded single-digit annual inflation – and compared to May, prices even edged down.
Price growth in Lithuania, which has been reporting some of the highest inflation rates in Europe, is slowing down. Statistics Lithuania report that prices in June were 8.2 percent higher than a year ago.
In May and April, annual inflation stood at 10.7 and 15.2 percent, respectively.
Compared to prices in May, June even saw monthly deflation of 0.1 percent. Economists say that has to do with falling prices of raw materials on world markets.
“Oil is so cheap, [...] everything has long since returned to the levels that existed before the Russian-Ukrainian war. Exactly the same with gas, cheap. There is a return and adjustment towards normality,” says Algirdas Bartkus, associate professor at Vilnius University.
Economists expect inflation to continue declining for the rest of the year.
“Our economy is becoming more stable, more predictable,” says economist Marius Dubnikovas.
But prices will not return to the levels of a year ago, before the price hikes, he adds.
“In 2022, we saw unhealthy price growth, that is, the speed of price growth was too high,” according to Dubnikovas, “but [prices] will not go back down because our wages are rising.”
Economist Bartkus expects food prices to be the first ones to stabilise.
“Given that food prices have risen abnormally high, abnormally fast, and much more [than production costs], these corrections are likely to be the most noticeable,” says Bartkus.
Shoppers, meanwhile, say they have yet to see prices moderating.
“Everything, everything is going up, the first thing my student [child] noticed was that a packet of chips is up by a whole euro,” says one woman interviewed by LRT TV.
“Prices are going down, are you kidding? I haven’t seen anything of the kind, everything is expensive,” says a man.
Experts at the price comparison service Pricer.lt also say that food prices have yet to start going down. While individual products may have become cheaper, others have gone the opposite way.
“The most significant price decreases were observed in those things that were the most expensive last year – sunflower oil cost more than 3 euros, now it costs 1.85. Dairy products, kefir, and butter are also cheaper, on average by about 10 percent. Sugar has become more expensive by more than 30 percent, sausages went up by more than 30 percent, and bread products are up by more than 30 percent,” says Petras Čepkauskas of Pricer.lt.
According to him, pork sausages have become more expensive because some pig farms have closed down. While there is no objective reason for bread prices to go up, they have because consumption is declining and producers do not want to lose income.
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