VILNIUS -- The Bank of Lithuania has decided that inflation
levels and GDP growth will both be higher than it previously thought and has
revised upwards its forecasts as a result.
A Jan. 25th bulletin issued by the bank notes that
the expected inflation figure has been hiked significantly from 5.7% to 7.9% on
the back of news that consumer gas prices are set to rise by more than 60%
during the course of 2008 and that food prices are also set to continue a
recent series of sharp price hikes.
GDP growth is also set to climb, the Bank believes,
from 7.4% to 8.1%. While such strong growth looks impressive and may help to
mitigate the negative effects of high inflation, it also points to the
overheated nature of the economy.
However, the Bank sees the situation cooling off in
2009 with projected growth at a more sustainable level of 5.7% and inflation
dropping off to 4.9%.
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