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Lithuanian January inflation rate falls to 4% on winter sales

The Lithuanian inflation rate fell to 4% in January on winter sales and falling fuel prices.

The rate fell from 4.5% in December, the highest in more than eight years, the Vilnius-based statistics office said in an e-mailed statement today. The figure was below the median estimate of 4.2% by six economists surveyed by Bloomberg. Prices were unchanged on the month. Lithuania was the first country to be rejected by the European Union to adopt the euro this year because inflation was too fast. Consumer prices have been boosted by import-led growth, which is more than twice the pace of the dozen of countries sharing the euro. Euro adoption is limited to countries that meet targets on inflation, budget deficits, debt, interest rates and currency stability. Inflation must be within 1.5 percentage points of the 12-month average rate of the three EU states with the slowest consumer-price growth. Clothing and shoe prices fell the most in the year, decreasing 4.4%. Prices of transport costs such as fuel, fell 3.4%. Lithuania's economy, the biggest of the three Baltic states, grew 7.4% last year and the average inflation rate rose to 3.8% last year. (Bloomberg)