Speaking about the rapid rise in food prices, the head of the Monetary Policy Department of the Bank of Latvia, Uldis Rutkaste, acknowledges in the TV24 program "The Price of Money": "This is something unusual for our Baltic market, as food prices have risen faster here than in other countries."
Rutkaste explains that when the Russian invasion of Ukraine occurred and food prices sharply rose, it was normal.
"Our prices have always followed global trends, but when they adjusted and began to decrease worldwide, ours remained high. And this is a historically unique moment because previously, when global prices went down, ours did too."
When asked why this has not happened now, Rutkaste suggests that the explanation may lie in the market situation allowing high prices to be maintained, and consumers have already become accustomed to this elevated level. This leads him to think that competition in the market is not as strong as it should be.
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