Residents of the Baltic States are currently experiencing a significant increase in food prices – 31% in Latvia, 33% in Estonia and 26% in Lithuania find that they can afford less food purchases due to price rises than before, Citadele Bank representatives report, citing the survey conducted.
Overall, over the past year, the majority of the Baltic population has experienced a rise in food prices, which is confirmed by 87% in Latvia, 85% in Estonia and 73% in Lithuania.
A third of the population of Latvia and Estonia, as well as 25% of the population of Estonia, indicate that their spending on food has increased slightly and, as a result, they can afford to buy less than before.
Meanwhile, 29% in Latvia, 24% in Estonia and 22% in Lithuania say that their spending has increased, but they can still afford everything so far.
Only 7% of Latvian residents surveyed said that their monthly food spending has not changed significantly. 6% responded similarly in Estonia and 11% in Lithuania. Among Latvian respondents, respondents with a monthly salary of at least EUR 1,500 most often responded this way.
The survey data show that the people of Kurzeme, Latgale and Zemgale felt the increase in food prices the most strongly.
Karlis Purgailis, Chief Economist of Citadele Bank, explains that although the rise in food prices in the euro area has slowed down significantly recently, over the last three years, the rise in food prices in the Baltic States has been more than 40%. In addition, it was even twice as large in the Baltic States as elsewhere in Europe.
Purgailis reminded that the total inflation was 2% in October, but it was food price inflation that was 5.5% compared to October of the previous year. At the same time, food price inflation in the European Union has been 2.9%, which confirms that the rise in food prices in Latvia is faster.
Although average wages continue to grow in Latvia, they are slower than inflation in the previous three years, says Purgailis. The economist predicts that wages will continue to grow faster next year than inflation and, as a result, the purchasing power of the population will also increase. Similarly, the World Bank forecasts that the prices of agricultural products will fall by 4% next year, so both beverage and food prices are expected to fall during the year.
Citadele conducted a representative survey of residents of the Baltic States on shopping habits in November, interviewing more than 3,000 respondents in the Baltic States aged 18 to 74. (BNN)