Lithuania’s key challenge in 2013 - curbing inflation

VILNIUS - The most important challenge for Lithuania in 2013 will be to curb the inflation, says Ernst & Young in their quarterly report for the European Union together with Oxford Economics.

It is predicted that the average inflation in Lithuania in late 2012 - early 2013 will exceed the Maastricht inflation criterion and will stand at 3.2 percent. A quicker fall of inflation in the future will be prevented by rising prices of power and an increase in the minimum monthly wage.

"Inflation will decline slackly, despite the new Government's promises of cutting VAT for staple foods, heating, passenger transportation and hotel services," the reports reads. According to the Ernst & Young experts, Lithuania's inflation next year will account for 2.8 percent.

Actions of the new Cabinet to stimulate the economy may delay the projected introduction of the euro in 2014 by at least a year. Lithuania is predicted to meet the criteria of joining the eurozone no sooner than in 2015.