Lithuania's economy grew at the slowest pace in a year in the fourth quarter as accelerating inflation squeezed consumer spending, Bloomberg reported.

Growth eased to an annual 7.9 percent from 10.8 percent in the previous quarter, the Vilnius-based statistics office said in an e-mail today. The median estimate of five economists in a Bloomberg survey was for an 8.9 percent pace.

The Baltic economy cooled from its peak in the third quarter as quickening consumer-price growth crimped domestic demand. Lithuanian shoppers spent less as their buying power weakened and demand for real estate slowed because of stricter lending requirements.

Full-year growth in 2007 quickened to 8.7 percent, compared with 7.7 percent in 2006, the office said.

The pace of retail sales growth in the last quarter of 2007 was the slowest in almost three years as inflation accelerated to 8.1 percent in December.

The central bank said on Jan. 25 that the economy may expand 8.1 percent this year, boosted by exports of agricultural goods and oil products.