The SEB Bank expects Lithuania’s average annual inflation rate to rise to 3% next year because an increase in excise taxes on fuel in January, as well as anticipated hikes in the price of energy resources, food and services, bank economist Tadas Povilauskas said on Tuesday.
“We expect energy costs to be slightly higher next year and food prices to rise, as well,” Povilauskas said during an economic outlook presentation at the bank. “We’re projecting growth of around 1.5% compared to the decline that occurred this year.”
“Services will grow more slowly next year than this year, and we believe that inflation in this area will be the main driver for overall inflation,” he added.
Povilauskas also pointed to a hike in excise taxes and the introduction of a new carbon tax component as of January 2025, arguing that this might increase petrol prices by around 4% and diesel prices by 9%.
SEB forecasts that Lithuania’s average annual inflation rate will decelerate to 1.2% this year.
“We believe that the lowest point of inflation is behind us, with annual inflation already above 2% in December,” the economist explained. “We anticipate that there will be months next year when inflation is above 3%.”
Source: BNS
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