Analytics, Inflation, Lithuania, Markets and Companies

The overall price change was mainly influenced by a decrease in prices for vegetables, heat energy, beer, footwear, as well as by an increase in prices for fuels, fruit, package holidays, passenger transport by air, tobacco products (see Table 2).

Over the said period, prices for consumer goods decreased by 0.4%, those for consumer services – increased by 0.9%. The influence of the changes in prices for consumer goods on the overall monthly price change was negative and stood at minus 0.29 percentage points,  while the influence of the change in prices for consumer services was positive and stood at plus 0.22 percentage points.

Prices for consumer goods and services regulated by State and municipal authorities decreased by 1%, while market prices increased by 0.1%. The influence of the change in prices regulated by State and municipal authorities was negative and stood at minus 0.15 percentage points, while the influence of the change in market prices was positive and stood at plus 0.08 percentage points.

Fig. 1. Monthly changes in prices for consumer goods and services, compared to the previous month

In June 2015, against May, among food products and non-alcoholic beverages, the largest decrease in prices was observed for vegetables – 12.1% (a 36.5% price drop was recorded for cabbages, 25.1% – fruit vegetables, 13.1% – green vegetables, while prices for bulb vegetables increased by 14.7%, root vegetables – 10.9%), while increase – fruit (5.6%). Prices for meat offal dropped by 4, ice-cream – 2.2, fruit and vegetable juice – 1.9, coffee – 1.7, flour – 1.3, salted fish – 1.2%, while prices for chocolate grew by 4.6, cacao – 4, oil – 3.2, rice – 1.6, turkey – 1.4%.

As regards goods related to energy, the largest price drop was observed for heat energy – 6.1, liquid fuel – 4.8, liquefied gas for cars – 3.3%, while price growth – diesel fuel (2.6%), petroleum (2.3%).

In the group of miscellaneous goods, the largest price drop was observed for equipment for sport, camping and open-air recreation (4.6%), beer (4%), bicycles (2.7%), equipment for cleaning (2.6%), footwear (2.2%), tools and equipment for house and garden (1.7%), while price growth – small tools and equipment for house and garden (2%), cigarettes (1.8%), non-electric kitchen utensils and items, non-durable household goods (1.3% each).

As for services, the largest increase in prices was observed for passenger transport by air – 15.3, package holidays – 8.1, sanatoriums – 5.7, housing rent – 2.1, accommodation services – 0.9%.

In June 2015, annual (June 2015 against June 2014) deflation stood at 0.5% (in June 2014, against June 2013, deflation stood at 0.2%).

The annual deflation was mainly influenced by a decrease in prices for fuels and lubricants, solid fuel, milk and milk products, cheese, eggs, gas, heat energy, as well as by an increase in prices for fruit, catering in restaurants, cafes and similar establishments, tobacco products, coffee, tea and cocoa, housing rent, spirits.

Over the year, prices for consumer goods decreased by 1.7%, those for services increased by 3.1%.

In June 2015, against June 2014, prices for consumer goods and services regulated by State and municipal authorities decreased by 2.7%, market prices – 0.2%.

In June 2015, average annual deflation stood at 0.5% (in June 2014, average annual inflation stood at 0.3%).

Table 1. Changes in prices for consumer goods and services, June 2015, %

Table 2. Largest influence on the overall change in consumer prices over the month by COICOP class of consumer goods and services

The overall change in consumer prices is influenced not only by the size of the price change for a certain product but also by the relative share (weight) of expenditure on that product in the total consumption expenditure.

Concepts

Deflation refers to a long-lasting decrease in the general price level, which results in an increase in the purchasing power of money.

Inflation is a long-term increase in the general price level, resulting in a decrease in the purchasing power of money. Inflation is usually calculated based on the consumer price index and expressed in  per cent.

Annual inflation shows the relative change in the average price level between the reporting month and the corresponding month of the previous year.

Average annual inflation shows the relative change in the average price level between the last twelve months and the corresponding previous twelve months.

More information on the issue is available in the Database of Indicators of Statistics Lithuania.