The Lithuanian consumer price index (CPI) grew 1.7% y/y in December, accelerating on the 1% annual growth recorded the previous month, data released by Statistics Lithuania on January 9 showed.

Inflation has remained positive every month since the start of this year on the back of rising household income and stabilising oil prices. The index grew 0.4% in monthly terms in December, following a 0.3% expansion the previous month. Annual average inflation in 2016 grew to 0.9%, the statistical office reported.

In annual terms in December, prices increased in all but three segments, with a 6.2% y/y boost in the hotels, cafes, and restaurants sector, followed by 3.8% price growth in the alcohol and tobacco segment. Those two segments also led for price growth in November. 

Prices fell in the communication sector, contracting 6.2%. There also was a fall of 2.9% in the utility sector and a 0.5% dip in the clothes and shoes segment. Prices of food and non alcoholic beverages gained 3.7%, much faster than the 1% expansion in November

The divergence between price growth in the goods segment versus that in the services segment became smaller again in December. Goods prices gained 1.5%, while services became 2.4% more expensive. In November, the prices were at 0.6% and 1.9%, respectively.

“Rising prices of commodities and increasing labour costs will push annual inflation higher this year. We expect that average annual inflation will reach 3.0% this year and will decelerate to 2.5% in 2018,” Swedbank writes.