Reuters – In October 2023, Lithuania producer prices experienced a significant contraction of 8.2% compared to the same period last year. This marks a further decline from the 5.9% decrease observed in the previous month and represents the most substantial contraction in the last four months.
The Impact on Various Sectors
The manufacturing sector was particularly affected, with prices falling by 8%, a more substantial decrease than the 5.5% observed in September. The electricity, gas, steam, and air-conditioning supply sector also saw a continued decline in prices, with a drop of 10.7%, slightly more than the 10.6% decrease in the previous month.
Interestingly, the mining and quarrying sector, which had previously seen a 7.1% increase, experienced a downturn with prices tumbling by 1.1%. The water supply sector also saw a slowdown in price increases, with a rise of 21.6% compared to 22.6% in the previous month.
On a month-to-month basis, October saw a 0.9% decrease in producer prices, a shift from the 1.4% increase (after revision) observed in the previous month.
The consistent contraction in Lithuania producer prices could have both positive and negative impacts on Lithuania’s economy. On one hand, lower producer prices can reduce costs for businesses, potentially leading to increased profitability and investment. On the other hand, sustained price decreases could signal weak demand, which may lead to reduced production and economic slowdown. Therefore, it’s crucial to monitor these trends closely to understand their potential economic implications better.