Food prices in stores in Latvia are beginning to follow global trends, said the President of the Bank of Latvia, Martins Kazaks, in an interview on the TV3 program "900 seconds" on Monday, according to LETA.
He noted that in previous years, there was a trend in Latvia: when food prices rose globally, they "followed suit" in Latvia, but when there was a decline globally, prices in Latvia remained at the same level and did not decrease.
“Gradually, it seems that prices are indeed starting to follow global trends — if they are decreasing in the world, then they are starting to decrease here as well,” said Kazaks.
Among other things, he positively assessed the introduction of a low-price basket in Latvian retail.
Kazaks also pointed out that the Bank of Latvia could influence the rise in food prices only in one way — by raising interest rates, but in this case, it would be the wrong step.
“Monetary policy can combat rising prices only in one way — by raising interest rates, but addressing the structural problems of one sector in this manner while pushing the rest of the economy into recession would be incorrect treatment. Therefore, in this case, monetary policy cannot stop the rise in food prices,” Kazaks stated, noting that the role of the Bank of Latvia in this matter is more about providing expert assessment.
He also emphasized that in the issue of food prices, the residents themselves play a very important role, as they "vote with their wallets," choosing which goods to buy.
