Lithuanian CPI growth eases further to just 0.3% y/y in May

Lithuanian CPI growth eases further to just 0.3% y/y in May
By bne IntelliNews June 8, 2020

The Lithuanian consumer price index (CPI) inched up 0.3% y/y in May, easing 0.7pp versus the annual reading the preceding month, Statistics Lithuania said on June 8.

Once again, the slowdown came mainly on the back of prices falling in the housing and transport sectors, an effect of the falling oil prices because of the coronavirus (COVID-19) pandemic that depressed the global oil market. Headline inflation could continue along the downward slope in the coming months, as the lockdown-induced economic crisis is expected to hit the labour market and household incomes, hurting demand.

Lithuania's economy is forecast to contract 7.9% in 2020 in the wake of the pandemic, the European Commission said in early May.

CPI was held back by prices falling 8.3% y/y in the second-most weighted transport segment, versus a decline of 4.8% y/y the preceding month. Prices also fell 4.1% y/y in housing, deepening the decline rate from -3.6% y/y in March. 

Elsewhere, prices also declined 2.1% y/y in clothing and footwear (-0.6% y/y previously).

Hovering just above the zero line, price growth in the fifth month still managed to extend the inflationary trend in Lithuania to 53 months straight. However feeble, growth in the headline CPI was driven by a 2.8% y/y increase in the most-weighted food and non-alcoholic beverages segment. That, however, was a slowdown of 0.6pp versus the y/y expansion in April.

Prices also expanded 3.3% y/y in the fourth-most weighted alcoholic beverages and tobacco segment, data also showed. Growth in that segment came in at 3.7% y/y the preceding month.

Prices also grew 1.2% y/y (1.5% y/y in April) in recreation and culture and 4.8% y/y (April: 5% y/y) in health care. The hard-hit accommodation and restaurant sector saw prices expand 5.8% y/y (April: 5.7% y/y)

Overall, prices of goods retreated 1.6% y/y in May (after falling 0.4% y/y the preceding month) while services became 4.8% more expensive in annual terms (April: 4.5% y/y).

In monthly terms, the CPI fell 0.5% y/y in May after inching up 0.1% m/m in April.

Data

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