Experts: Latvia's food prices should continue to fall in coming months

In the near future food prices in Latvia will continue to fall,  although in the longer term, it should not be expected that they will return to the level of before the Russian war in Ukraine, according to expert opinions in LETA's discussion on July 24.

“Prices should be going down right now, that is right. But to think that this fall will continue all the time and we will be living again in the utopia that preceded this great climb … It will not. It just isn't possible anymore. Many cost components have grown and will not decrease," said Ingūna Gulbe, head of the Institute for AgroResources and Economics, Head of Agricultural Market Promotion.

Noris Krūzītis, executive director of the Association of Food Traders, said that food price inflation will continue to fall by three or four percentage points in the coming months. He also expressed, though the trend is common, figures may differ.

On the other hand, Guntis Gūtmanis, Chairman of the Board of Cooperation of Agricultural Organizations, stressed that we live in a global world. Therefore, the war in Ukraine, the weather and what is happening on world markets will have a major impact on food prices.

He stressed that forecasts are always just forecasts. “If we remember what happened with Covid-19, when we simply closed the borders and could not bring in anything, if we look at the war in Ukraine, then I think economic analysts may soon have no job because their forecasts can either come true or not,” said Gūtmanis.

He also expressed that agriculture needed to do everything so that Latvia could feed itself. “We need to provide the most agricultural production so that we can supply ourselves because it is a matter of national security. We see what Ukraine is experiencing at the moment, and that is what we should focus on primarily,” said Gūtmanis.

Central Statistical Bureay data shows that since May, food prices have had the biggest impact on total inflation in Latvia. If overall inflation fell below 10% in June, then in the food and nonalcoholic beverage group, prices were still 14.4% higher than a year ago at that time. In June, food prices fell by 0.1% compared to May. 

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