PM: Food prices in Iceland increasing too much, too fast

johannaIceland’s Prime Minister Johanna Sigurdardottir, believes that food prices have increased too quickly in the last year or two. She told reporters it is essential to reduce inflation and interest rates and to remove currency controls as quickly as possible. Food price hikes are a result of these three factors, she said.

According to figures from Statistics Iceland, a person’s disposable income must now be over ISK 160,000 (USD 1,242) per month to keep him/her over the poverty line. This figure apparently does not take account of increased food prices, which have gone up by around 36 percent in two years.

“I find that much too much and that’s why it is really important that we can work our way out of this situation,” the PM told RUV. “The most important part of that is to bring inflation down. Next we need to bring interest rates down. If we can do these things together and can relax the currency exchange restrictions then we can send prices down again,” she said.

Sigurdardottir says she does not believe shop owners are simply profiteering by increasing prices simply to add more profit. She says that the Confederation of Icelandic Industries’ Price Control Board keeps retailers honest in that respect.

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