Šimonytė: long-term deflation would have negative consequences for economy

Prime Minister Ingrida Šimonytė says it is preferable that inflation in Lithuania would decrease to single digits but long-term deflation would be detrimental for the economy and consumers.

“Deflation is not a very desirable phenomenon because it is detrimental for the economy. While we are speaking about two-digit inflation, we are pleased that disinflation is happening. That is when inflation slows down and every month we see numbers decreasing and in the middle of the year we will likely witness single digit percentages. In some months it is possible that we will also see negative inflation,” Šimonytė told the radio station Znaw Wilii on Wednesday.