We will not avoid a price jump: we predict that autumn can be very difficult

Changes in food prices – soon

Arūnas Vizickas, director of the Pricer.lt portal, says that so far no significant changes have been noticed in food prices in Lithuania, but such a situation may change very soon.

“News is already coming from the market that the most important food raw materials (corn, oil, soybeans, grains) are already becoming more expensive, fuel prices are increasing and we will probably start monitoring changes in food prices in retail shelves soon, “Delfi said. TV Opinions ”, intervened A. Vizickas.

According to him, a significant jump is observed in the fuel market, where the price increase began in April-May.

Group Head INVL Economist Indrė Genytė-Pikčienė claims that the increase in the price of raw materials, as observed now, has not existed for a long time. According to her, the price hike was due to both mining companies and factories operating at partial capacity due to the pandemic.

“Both the prices of industrial metals have risen on average 70% and the prices of food raw materials are rising quite steeply. It all consists of a common denominator of pandemic when factories were forced to apply quarantine restrictions and several closures. It is natural that local and global imbalances of demand and supply will later form, that is, the deficit of goods and raw materials, “said the economist.

“Another very important moment is the behavior of individual players in the world’s largest commodity market. Since last fall, for example, China has been building stocks, preparing for its economic recovery and reducing its supply in all international markets, while exporting countries such as Russia are only trying to protect the domestic market from rising prices of goods. raw materials and defending itself through various protectionist measures, higher tariffs, quotas, etc. It also causes a shortage of raw materials and raises prices, ”he explained.

However, even with the release of the quarantine in the world, according to I. Genytė-Pikčienė, the supply will not necessarily recover immediately: As you know, strategic decisions like the Green Course will increase it. “

Difficulties can appear in the fall.

According to I. Genytė-Pikčienė, the observed post-pandemic effect, as predicted by the European Central Bank (ECB), should be temporary, but Lithuania is at risk of secession.

“We have suffered less from the pandemic and the ECB is measuring the average temperature. There are countries that are far from the same in our recovery. We are in danger of experiencing certain signs of overheating because we do not have many instruments to handle emerging threats from the monetary side. On the fiscal side, we have the tools, we can still see that managers are in no rush to use them until now, ”said the economist.

Mykolas Majauskas, president of the Budget and Finance Committee of the Seimas, assured at that time that the rulers were determined to respond to the rise in prices.

“The government is forced to respond to rising prices by increasing wages. We are ready to do that, but we are well aware that it can also lead to an imbalance in the economy, with higher wages and higher prices,” he said.

“The government can cut taxes and increase salaries in the public sector. We have always done it and we are willing to continue doing it if we see that prices are rising,” emphasized the member of Seimas.

According to I. Genytė-Pikčienė, although the indicators observed so far are not scary, the biggest test can wait in autumn, then annual inflation can rise up to 5 percent.

“So far, the observed inflation figures are not so scary. For a young and dynamic economy like Lithuania 3.5 percent. The inflation that we have just registered is not very high in 2007, especially considering that wages rose one tenth in the first quarter and up to 14% in the public sector. The straight line towards inflation is just beginning and is gathering momentum. The peak is probably waiting for our fall, “said the economist.

“Lithuania has seen various inflation indicators, today the forecasts are getting old every month; last month I forecast 2.8 percent.” average annual inflation already seems too optimistic. In autumn, we can also observe 5 percent. Annual inflation, everything can be, because the end of the quarantine restrictions will also contribute ”, he predicted.

A. Vizickas, the director of the Pricer.lt portal, also warns that after spending the summer, residents may face difficulties in the fall.

“It seems to me that we will have a pretty happy summer period, when people will relax, carelessly, on vacation after the pandemic, but in the fall we will probably face some ‘hangovers’: higher utility costs, possibly when we get to the store. we will spend more, we will spend even more, we will want to buy some industrial goods, again we will have higher prices and appliances, etc. At this point, I imagine, and the true equilibrium of the market will begin, when the desire to sell more expensive will face the possibility of buy it, ”said A. Vizickas.

“We can have different scenarios. It will be smoother if we give up the unnecessary and pessimistic if we start saving a lot, because it simply is not enough. It is very difficult to get a consumer out of austerity and it can already have a very strong impact on the entire economy, ”he told Delfi TV’s Facts and Opinions.