Lithuania has third highest inflation rate in Europe

The combined annual inflation in Lithuania in April was one of the highest among the 28 European Union countries and only lower than in Sweden and Belgium, Eurostat data released on Wednesday shows.

“The rate may sound impressive, but only in the context of the countries in which the prices are not growing or shrinking at all. This rise in prices is determined by first of all, seasonal factors with higher prices of clothing and some other goods. Second, due to wage growth something that many European countries are not experiencing,” said economist Nerijus Mačiulis.

“I do not know whether Lithuanians would object to a 1% inflation rate but along with the increased salaries we would probably would not want to swap our situation with countries where there is no growth neither in wages or in prices,” said the Swedbank economist.

Mačiulis, during the first quarter of this year wages grew by about 7% but prices in Lithuania increased at a much lower rate than that.

“It is normal that prices are rising the fastest in those countries where the economy is growing rapidly and where salaries are rising the fastest. This increases the costs and increases the prices. And this rise in prices, which we are witnessing, is one of the lowest in the last 20 years in Lithuania,” said Mačiulis.

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