Inflation hits those who like “bent glass” more gently than healthy people

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Business
2024.07.14 19:55

Žygymantas Mauricas, chief economist at Lumino Bank, said that vodka prices have risen less than food prices over the past four years because inflation has risen sharply but also because of an increase in alcohol excise taxes, so inflation is “hitting” healthier people more.

According to The Economist, between 2020 and June this year, food was more expensive than alcohol and tobacco (up 48%, 29% and 30% respectively), while vodka was cheaper than water (the price rose by 21%, 30% and 22% respectively).
“This is happening because inflation is rising sharply from 2021 to 2023, causing food prices to rise sharply, but consumption taxes are not being raised so quickly,” Morris wrote on his Facebook account on Friday.
“The affordability of Lithuanian vodka has reached an all-time high, i.e., an average monthly salary in Lithuania (1,333 euros) can currently buy up to 138 half-liter bottles of vodka at 9.63 euros – this is twice as much as in 2010 and three times as much as in 2002,” the expert explained.
According to Z. Maurico, excise taxes on vodka have increased by 22% over the past four years, while excise taxes on beer and wine have increased by 33%, and because excise taxes make up a large portion of the price of alcoholic beverages, alcohol prices overall have risen faster than the prices of many other food items – for example, the price of milk has increased by 66%, while the price of vodka has only increased by 21%.
“The stagnation of food price increases and the increase in excise taxes on alcohol and tobacco should allow things to return to normal in the near future,” the economist noted.
The annual inflation rate in Lithuania in 2024 is 1% compared to June a year ago, or 0.7% based on the Consumer Price Index (CPI), according to the National Statistics Agency.
The average annual inflation rate calculated in June is 2.4%, based on the consumer price index that is harmonized with other EU countries in 2024. The average annual inflation rate calculated according to the Consumer Price Index (CPI) is 2.1%.