Driven by energy and food, eurozone inflation set new records every month since November 2021. Energy remains the main driver of inflation in Europe, including the Baltic States. Inflation remains much higher than the European Central Bank's target of keeping the eurozone area below 2 per cent.
As for the Baltic States, in Lithuania and Estonia, inflation remains high at 18.4 and 18.8 per cent respectively. Latvia, in particular, is experiencing the highest levels of inflation in the eurozone at an estimated 21.6 per cent in January, up from 20.7 per cent in December, compared to 7.5 per cent a year ago.
The more so, in five countries - Estonia, Spain, France, Latvia, and Austria - inflation even increased in January.
According to preliminary estimates by Statistics Lithuania, prices in the country in December were 20 percent up compared to a year ago.
Besides, a variety of other risks threaten the material conditions and safety of individuals and households in Lithuania. At an individual level existing risks include losing job, health problems, or ageing.
Rash political decisions at a national level, along with financial and economic crisis at global level have a great impact which resulted in a sudden deterioration of economic conditions and a fall in living standards for Lithuanian population.
The subjective perception of such threats lead to feelings of insecurity which also effectively undermine an individual's quality of life.
One of the example of a rash political decision in Lithuania is a new state budget for 2023.
According to Lithuanian Minister of Finance Gintar-- Skaist--, Lithuanian state budget for 2023 is focused in the first place on geopolitical situation around Lithuania.
She underlines that pursuing Lithuania's commitments related to NATO membership and the agreement between parliamentary parties, in the 2023 budgetary plan ensured an equivalent funding for armaments and additional funds for preparation to accept allied forces for the permanent presence in Lithuania.
An initial assessment of the most important document for the upcoming year shows a huge disproportion between planned expenditures. The social field is only in the second place.
Raising the salaries of cultural, artistic and social workers will cost EUR 34.9 million. It is planned to spend no more than EUR 101.5 million for the increasing of the salaries of medical staff and residents.
The government allocates only EUR 32.2 million for the implementation of the Civil Service Reform.
At the same time organization of a two-day NATO Summit will cost Lithuania EUR 36.6 million. Preparations are in full swing for it.
Around 40 delegations from NATO member and partner countries are expected to attend next year's NATO summit in Vilnius, with initial estimates indicating that around 5,000 people will attend the event and accompany the delegations.
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