Household consumption expenditure in Latvia reached an average of 619 euros per person per month in 2025, an increase of 46% compared with 2019, according to data from the Central Statistical Bureau (CSB). However, with inflation expected to return to more moderate levels in the coming years and wages continuing to rise faster than prices, household spending is likely to continue increasing, albeit at a slower pace than in recent years, says Kārlis Purgailis, Chief Economist at Citadele Bank.
Almost a quarter, or 24%, of total household expenditure last year was spent on food and non-alcoholic beverages, while housing costs accounted for 16% and transport for 12%.
Compared with 2019, spending on food increased by 53 euros per person per month, while housing expenditure rose by 39 euros.
“The rapid increase in household spending in recent years has mainly been driven by high inflation. Although expenditure has risen by almost half over six years, the increase in comparable prices has been only around 7%. This means that most of the growth is directly linked to higher prices rather than a significant increase in consumption volumes,” Purgailis said.
He explained that rising energy prices, high food inflation and more expensive services have had the greatest impact on household budgets in recent years. At the same time, average wages and household incomes have also increased, allowing people to spend more not only on everyday necessities but also on leisure, culture and other services.
“Recent data clearly show that basic necessities continue to dominate the spending structure of Latvian households. Food, housing and transport account for more than half of total expenditure. At the same time, CSB data show that the share of several spending categories in household budgets has declined since 2019. The most notable decrease has been in transport expenditure, which fell from 15% to 12%. A smaller share of household budgets is also being spent on personal care and various goods and services, household furnishings and maintenance, clothing and footwear, as well as healthcare,” the economist added.
CSB data also reveal significant regional differences in household consumption expenditure. Residents of the Riga region spent the most, averaging 750 euros per person per month, while the lowest expenditure was recorded in Latgale at 446 euros per month.
The type of place of residence also had a significant impact on spending.
In Riga, average monthly expenditure reached 781 euros per person, compared with 657 euros in other cities and considerably less – 524 euros per month – in rural areas.
According to the economist, household expenditure growth is likely to become more moderate in the coming years as inflation has declined significantly. Inflation this year is forecast to remain moderately elevated at around 4% due to rising global energy prices, but over the following couple of years it is expected to fall to around 2.2–2.3%.
At the same time, wage growth and a resilient labour market are expected to support households’ ability to maintain relatively stable consumption levels. Average wage growth is projected to gradually slow from 7.8% last year to 5.4% in 2028, which would still exceed the projected rate of inflation.
Based on current forecasts, average consumption expenditure could exceed 700 euros per person per month by 2028.
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