Financial TimesFinancial Times

Inflation in the Baltics: A warning for the rest of Europe

By Martin Arnold and Richard Milne

28 Dec 2022 · 9 min read

Editor's Note

The Baltics are a “canary in the coal mine” for the wave of inflation that's hitting Europe, Latvia’s central bank governor tells the FT. The upshot is that price rises may soon become the new normal.

When inflation reached an almost unthinkable 20 per cent this year in Lithuania, residents in the rural south of the Baltic country began to tighten their belts.

“People are buying less. It’s hard. Everybody is trying harder, wearing what they already have more, shopping less,” says Laima, a 58-year-old woman who sells socks and other clothes from the boot of her car.

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