VILNIUS - The rate of inflation in Lithuania appears to be slowing down, with the economy producing better figures than analysts had forecast. The national statistics agency has announced that July inflation was the lowest it has been for nearly a year, with increases in consumer prices of only 0.4 percent.
The department had forecast a 0.4-percent monthly rise in the EU-harmonized monthly consumer price index for July, as well as a 12.4-percent increase in 12-month inflation and a 9.87 rise in average annual inflation.
But the 12-month inflation rate was still 12.2 percent, and the average annual inflation rate was 9.7 percent, according to agency figures.
Increased housing and transport costs and rising food and drink prices were responsible for much of the inflation, the Department of Statistics reported on Aug. 8.
The inflation statistics accompany falling GDP growth in the second quarter of 2008 as compared to 2007. A total of 5.5 percent growth was recorded during the period.
Lithuania's GDP in the last quarter has been estimated at 28.4 billion litas at current prices by the statistics department.
This level is still relatively high compared to the other Baltic states, where negative growth is expected in the near future. Currently Latvia has 0.2 percent growth and Estonia 0.4 percent in the predicted hard landing.
A press release from the Statistics Department reported that the 12-month inflation rate in July was 12.2 percent and the average annual inflation rate at 9.7 percent.
Nijole Salteniene, Deputy Head of the Price Statistics Division at the Statistics Department, said that living costs were driving the current inflation.
"Water heating and rent is growing fast. This and electricity costs are the biggest influences," she said.
The monthly rise in consumer prices in July was mostly due to increased prices for housing, water, electricity, gas and other fuels, up 1.2 percent. Other factors included transport costs, which went up 1.1 percent, and prices for food products and soft drinks, up 0.4 percent. This was partly offset by a 4.1 percent drop in prices for clothes and footwear.
Year-on-year, food and soft drink prices rose by 18.1 percent. Prices for housing, water, electricity, gas and other fuels also increased by 18.1 percent, and transport costs were 17.5 percent higher. Clothes and footwear prices fell by 4.1 percent.
Prices for consumer goods edged up by 0.1 percent in July from June and prices for consumer services were up by 1.3 percent. Year-on-year, growth reached 12.2 percent in each group.
Changes in prices for the group of transport goods and services were mainly influenced by a 8.1 percent price rise for liquefied gas for cars, 0.9 percent for petrol and 1 percent for passenger road transport services. Passenger railway transport services went down in price by 2.8 percent, and bicycles at 0.9 percent.
The major impact on the price change for food products and non-alcoholic beverages was made by a 2.3 percent price rise for meat and meat products, 0.7 percent for bread and cereal products.
A 1.1 percent rise was seen in mineral water, soft drinks and juice and 0.7 percent for fish and fish products, butter, oil and fats. The price of vegetables dropped the most precipitously, by 13.7 per cent.
Lithuania has struggled with high inflation in recent years 's the number has skyrocketed since the country was denied entrance into the Eurozone over inflationary fears. Since then, inflation has been among the highest in the European Union, only bested by the other Baltic states and Bulgaria.
Statistics Lithuania, together with other EU member states, calculates the index of consumer prices, harmonized according to the methodology, to measure inflation in the EU every month.