Inflation in Lithuania falls to lowest in 20 months

VILNIUS - Lithuanian inflation in May was the lowest in 20 months, as growth of food and beverage prices eased, reports Bloomberg.

Consumer prices rose 2.5 percent from a year earlier, compared with a 3.2 percent increase in April, Statistics Lithuania said today. The median estimate of five economists in a Bloomberg survey was for a 2.6 percent increase. Prices increased 0.1 percent from the previous month.

Decelerating inflation will help shore up Lithuania's domestic consumption and economic expansion, which slowed to 3.9 percent in Q1. Improving inflation expectations helped raise consumer sentiment to the highest in eight months in May.

Lithuania also needs price growth to ease to qualify for its planned euro adoption in 2014. Countries seeking to make the currency change must keep inflation at less than 1.5 percentage points above the average of the three lowest levels in the European Union.

Lithuania's 12-month consumer-price growth was 4.1 percent in April, according to Eurostat, while the threshold for the currency changeover was 3.1 percent.