Vilnius - Lithuania's annual inflation eased to 12.2 per cent in July, down from an 11-year high of 12.5 per cent in June, the Department of Statistics reported Friday.

Rising inflation, coupled with slower growth, is increasingly clouding the economic prospects for the small nation, once known as one of the "Baltic Tigers" along with Estonia and Lithuania.

International organizations including the International Monetary Fund have said Lithuania, along with neighbouring Latvia and Estonia, faces the prospect of a recession amid a drop in consumption and property prices.

The three Baltic countries, which joined the European Union in 2004, have been struggling with high inflation after strong economic growth in recent years, slowing down their timetable for eventually being able to joint the single-currency eurozone. (dpa)