The Lithuanian Economy - April 10
Demand keeps a lid on inflation, but oil will stimulate it
- The rate of growth of industrial prices continued decelerating in March; however, prices of goods sold in the local market started growing faster than those sold in foreign markets, reflecting stronger domestic demand.
- Consumer prices grew by 1% in March, at the fastest pace in a year, and were 3.6% higher than a year ago. Higher-than-anticipated oil price growth might contribute to higher inflation going forward even though the growth of manufacturing prices has subsided.
- Lithuania’s term of trade deteriorated somewhat in 2011 as import prices grew faster than export prices. This was caused by a spike of oil prices at the beginning of this year and relatively weak demand in the main export markets.