The biggest inflationary factors have been rising service prices and more expensive food. The effects were only mitigated by cheaper energy, said Danske Bank economist Rokas Grajauskas.
“Statistics Lithuania estimates that service prices grew 4.8% in February, which is a massive rise, primarily influenced by growing wages and consumption. Prices of food products grew on average 0.5%, any further rise was prevented by the continuing Russian embargo [on Lithuania food imports],” Grajauskas said.
Cheaper oil resulted in petrol prices dropping 4 to 5% below the level a year ago and heating bills were on average 6% smaller this year.
However, global oil prices are bound to bounce back and add to inflationary pressures of wage growth, estimated by Danske Bank to reach 6% this year, and growing consumption.
Inflation might approach 2% at the end of the year, Grajauskas says.