Rising food prices and everyday expenses have become a widely discussed issue in Latvia. The latest Eurostat data on the price level index for household final consumption expenditure also show that Latvia can no longer be considered one of the cheapest countries in the European Union (EU).
For some everyday expenses, prices in Latvia have already overtaken those in some of Europe’s wealthier countries. Nevertheless, the overall price level of goods and services in Latvia remains 17% below the EU average.
The greatest pressure on household budgets comes from essential expenses that people cannot easily avoid. Compared with the EU average, Latvians pay 7.5% more for food, 4.6% more for clothing and footwear, and 5.2% more for alcohol and tobacco products.
The main reason Latvia’s overall household consumption price level remains relatively low, at 83% of the EU average, is the lower cost of domestically provided services, including healthcare, education and transport, as well as housing.
Compared with Western Europe, Latvia still has a significant price advantage in these categories.
Housing costs, for example, are 44% below the EU average, healthcare costs are 31% lower, education 20% lower and transport 16% lower.
“The data confirm that certain essential expenses place a significant burden on household budgets, and for several everyday goods and services we are already paying Western European-level prices or even more. At the same time, lower service costs continue to cushion the overall cost of living,” said Kārlis Purgailis, economist at Citadele Bank.
“However, every year the overall cost of living is moving closer to the EU average. This is largely driven by the rapid wage convergence seen in Latvia and across the Baltic region, which encourages local producers and retailers to raise prices to cover rising labour costs,” he explained.
According to Purgailis,
because food and clothing are easily imported goods, their prices are among the first to converge with European levels,
while Latvia’s domestic services sector is still catching up.
A comparison of the Baltic states reveals two distinct trends. Lithuania’s overall household consumption price level is exactly the same as Latvia’s, at 83% of the EU average, while the cost of living across individual categories of goods and services is also very similar in the two countries.
Estonia, however, is in a markedly different position. Its overall price level is now practically in line with the EU average, reaching 101%. Food, clothing and footwear, alcohol and tobacco products are more expensive in Estonia, while housing costs are also approaching the EU average.
Although the cost of living in Latvia and Lithuania remains lower than in Estonia, neither country can any longer be considered cheap.
Across the EU, household final consumption price levels varied significantly in 2025, ranging from 63% to 140% of the EU average, which is set at 100.
The highest household consumption price levels were recorded in Denmark, at 140% of the EU average, followed by Ireland at 136% and Luxembourg at 132%.
At the other end of the scale, consumers paid the least for comparable goods and services in Bulgaria, at 63% of the EU average, followed by Romania at 65% and Poland at 73%.
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