The latest inflation rate for Lithuania (LT) was released on November 10, 2025, showing a year-over-year (YoY) increase to 4.10%, up from 4.00% in October. This figure slightly exceeded the market consensus estimate of 4.00%, according to the Sigmanomics database. The inflation rate has hovered around 4% since April 2025, marking a sustained period of moderate inflation above the European Central Bank’s (ECB) target of 2%. This persistence reflects ongoing cost pressures in key sectors.

Drivers this month

• Shelter costs contributed approximately 0.18 percentage points (pp) to inflation.
• Energy prices rose modestly, adding 0.12 pp.
• Used car prices declined, subtracting -0.05 pp.

Policy pulse

At 4.10%, inflation remains well above the ECB’s 2% target, maintaining pressure on monetary authorities to consider further tightening. The current rate is consistent with a cautious stance, balancing growth risks and inflation containment.

Market lens

Initial market reaction was muted. The EUR/LTL currency pair showed minimal movement, while short-term government bond yields edged up by 3 basis points, reflecting steady but not alarmed sentiment.

Core macroeconomic indicators underpinning Lithuania’s inflation environment show mixed signals. GDP growth for Q3 2025 was 2.30% YoY, slightly below expectations but still positive. Unemployment remains low at 5.10%, supporting wage growth, which in turn fuels consumer price pressures. The Producer Price Index (PPI) rose 5.20% YoY, indicating upstream cost inflation that may pass through to consumers.

Monetary policy & financial conditions

The ECB’s key interest rate stands at 3.50%, unchanged since September 2025. Financial conditions remain moderately tight, with credit growth slowing to 4.00% YoY. The Lithuanian central bank aligns closely with ECB guidance, emphasizing inflation control while monitoring growth risks.

Fiscal policy & government budget

Lithuania’s fiscal stance remains prudent. The government budget deficit narrowed to 1.80% of GDP in Q3 2025, down from 2.30% a year earlier. Public spending is focused on infrastructure and social programs, with limited stimulus, helping to moderate demand-driven inflation.

Energy and shelter costs have been the main contributors to this upward trajectory. The moderation in used car prices provides some relief but is insufficient to offset other upward pressures. The inflation path suggests a gradual normalization rather than abrupt spikes.

Market lens

Immediate reaction: EUR/LTL remained stable within a 0.10% range post-release, while 2-year government bond yields rose modestly by 3 basis points, reflecting cautious investor sentiment.

Looking ahead, Lithuania’s inflation trajectory will depend on several factors. The baseline scenario projects inflation stabilizing around 4.00% through Q1 2026, supported by moderate wage growth and steady energy prices. This scenario carries a 55% probability.

The bullish scenario (25% probability) assumes a faster decline in energy costs and easing supply chain pressures, pushing inflation down to 3.20% by mid-2026. Conversely, the bearish scenario (20% probability) envisions renewed geopolitical tensions disrupting energy supplies, driving inflation above 5.00%.

External shocks & geopolitical risks

Ongoing tensions in Eastern Europe and global energy market volatility remain key downside risks. Lithuania’s energy import dependence exposes it to price shocks, which could exacerbate inflationary pressures unexpectedly.

Structural & long-run trends

Demographic shifts and productivity gains may gradually ease inflation over the medium term. However, wage growth linked to tight labor markets and housing shortages could sustain core inflation above ECB targets for several years.

In summary, Lithuania’s inflation rate of 4.10% YoY in November 2025 signals persistent but manageable inflation pressures. Monetary policy remains on alert, balancing growth and price stability. Fiscal prudence and structural reforms will be crucial to anchoring inflation expectations. External risks warrant close monitoring, especially energy market developments.

Investors and policymakers should prepare for a range of outcomes, with inflation likely to remain above target in the near term but with potential for gradual easing if external conditions improve.

Key Markets Likely to React to Inflation Rate YoY

Lithuania’s inflation data typically influences currency, bond, and equity markets sensitive to inflation expectations and monetary policy shifts. The following five tradable symbols historically track inflation trends or react to policy adjustments:

• EURUSD – Euro-dollar pair reflects ECB policy shifts driven by inflation data.
• OMX – Nordic-Baltic equity index sensitive to regional economic conditions and inflation.
• USDLTL – Dollar-Lithuanian litas pair (historical reference) tracks local inflation and monetary policy.
• BTCUSD – Bitcoin often viewed as an inflation hedge, reacting to inflation surprises.
• SEB – Major Nordic bank with exposure to Baltic economies, sensitive to interest rate changes.

FAQs

What is the latest Inflation Rate YoY for Lithuania?

The latest inflation rate for Lithuania is 4.10% YoY as of November 2025, slightly above expectations.

How does Lithuania’s inflation compare historically?

Inflation has risen from 2.10% in January 2025 to 4.10% in November, reflecting sustained upward pressure.

What are the main risks affecting Lithuania’s inflation outlook?

Key risks include energy price volatility, geopolitical tensions, and wage-driven cost pressures.

Takeaway: Lithuania’s inflation remains elevated but stable, requiring vigilant policy and market monitoring amid external uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.