Analytics, Inflation, Lithuania

According to the analyst, the oil prices bubble is fading and this is thought to be related to scouted oil resources, decreasing liquidity and thinning belief that China and its neighbors may support economy growth.

"The decrease of oil price will favorably influence the oil consuming countries and affect the oil extracting countries in a negative way. The oil price slump in turn is expected to permit reducing energy costs and reactivate "cooling" economy. The slumping oil price is also to reduce inflation – both via the oil price component and by influencing food prices," the analyst explains. According to him, the analysis shows that the oil prices bubble was growing on speculations.

The analyst"s claims are confirmed by Lithuania"s inflation forecasts. According to the forecasts of the Lithuanian Department of Statistics, the monthly inflation calculated according to the harmonized index of consumer prices (HICP) will reach 0.4% in September this year and the annual inflation will stand at 11.11% compared to August. The average annual inflation should reach 10.74% in September.

According to Jurga Ruksenaite, chief specialist of the methodology and quality department of the Statistics Department, stabilization is forecasted for the petrol market, therefore this group of goods will not affect inflation in September.