Hot summer in Lithuania did not cool down consumption of non-essential goods and services
Data from SEB bank on card payments using bank card readers shows that in summer residents spent 14% more on goods and services in Lithuania than at the same time last year. This annual change was about 5 percentage points higher than in summer 2025.
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The annual peak in card payment value was reached in mid-April, and in the following months the change steadily decreased, with growth in August only slightly higher compared to the period before April. It is clear that such consumption activity was mostly driven by funds withdrawn from second-pillar pensions.
Of course, changes in residents’ incomes should not be underestimated. As incomes grow, residents can afford more. This year, the average net wage in the second quarter was almost 9% higher, and the average old-age pension was 12% higher than last year. But such changes are very similar to the trends observed last summer. The household savings rate also did not significantly decrease this year.
More spent in construction goods, furniture, and jewelry stores
In summer, the value change of card payments in construction goods stores stood out with growth exceeding 20 percent. The value of card payments in furniture, telecommunications equipment, household appliances, and sports goods stores grew faster than last year and still at a double-digit pace. Jewelry sellers could also enjoy historically high turnover growth due to allowed withdrawals from second-pillar pension funds.
Withdrawn second-pillar pension fund money did not affect traders of food, beverages, and tobacco. Card payments in these stores grew by about 6% in summer, or slower than at the beginning of the year. This slower growth was mostly due to the disappearance of food price inflation. However, we believe that food prices may rise in the coming months due to increasing prices of some agricultural products and continuing rising energy-related costs.
Much more spent on trips abroad than last year
The most striking is the jump in card payments in the Balkan countries this summer. It clearly shows that the region is increasingly being discovered by tourists from Lithuania. The biggest growth was the spending surge in Albania, where the change in card payments exceeded 150 percent. Direct flights from Vilnius to Tirana over the past two years are probably the main reason for such growth.
Moreover, the Balkans are relatively cheaper and these countries are little known, so they attract more and more foreign tourists. The annual change in card payment value in summer in countries like Romania, Bulgaria, Montenegro, or Bosnia and Herzegovina increased by more than 50 percent.
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Not by change but by funds spent, Southern European countries continued to dominate summer vacations: Italy, Spain, and France. In these countries, card payment amounts grew much stronger this summer than last year – the annual change exceeded 20 percent. It is also interesting that last summer card payment data in Greece and Croatia showed no growth (Greece probably due to fires in previous years, and Croatia due to rapid price increases), but this year these countries returned to travelers’ attention and the payment change was greater than 20 percent.
The change in residents’ card payments in summer shows that the Caucasus countries – Georgia and Armenia – also received much attention. Residents’ expenses also grew strongly in even more distant countries such as China, South Korea, and Indonesia.
However, expenses abroad increase not only because more travel is happening but also because service prices abroad are rising. Eurostat reports that, for example, in Southern European countries, catering and accommodation prices increased by 3-5 percent over the year.
In autumn, spending on non-essential goods and services is expected to grow more slowly
It is likely that the annual change in residents’ consumption expenditures in autumn will be more modest than in summer but will remain historically quite strong. The impact of withdrawn second-pillar pension fund money on consumption will decrease. Although inflation of prices for consumer goods and services has accelerated in Lithuania, and interest rates have also increased, consumer expectations in August remained almost unchanged compared to last year.
On the other hand, higher inflation and increased interest expenses will increasingly negatively affect real household consumption, especially since the threat that the cold season may be much more expensive due to higher heat, biofuel, and electricity prices than last year is significant.
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