In 2025, household consumption expenditure in Latvia reached an average of 619 euros per month per capita, which is 46% more than in 2019, according to data from the Central Statistical Bureau (CSP).

“As inflation returns to more moderate levels in the coming years and wages continue to grow faster than prices, household expenditure is likely to continue to rise, though at a slower pace than in recent years,” notes Kārlis Purgailis, Chief Economist at Citadele bank.

Almost a quarter, or 24%, of total household expenditure last year was allocated to the purchase of food and non-alcoholic beverages, while 16% accounted for housing maintenance costs, and 12% for transport costs. Compared to 2019, spending on food increased by 53 euros per month per person, and for housing by 39 euros.

Kārlis Purgailis, Chief Economist at Citadele bank: “The rapid rise in household spending over the last few years is mainly explained by high inflation. Although expenditure has increased by almost half over six years, in comparable prices the rise has been only about 7%, which means that most of the increase is related specifically to rising prices rather than a significant increase in consumption volume.”

He explains that the most significant impact on household budgets in recent years came from the rise in energy prices, high food inflation, and the increased cost of services. At the same time, average wages and household incomes have also grown, allowing more funds to be directed not only to daily needs but also to leisure, culture, and other services.

“Recent data clearly show that basic needs continue to dominate the structure of Latvian household spending. Food, housing, and transport make up more than half of total expenditure. At the same time, CSP data also show that since 2019, the share of several expenditure groups in household budgets has decreased. For example, the most marked decline is seen in transport costs, the proportion of which has fallen from 15% to 12%. A smaller share of the budget is also allocated to personal care and various goods and services, household equipment and maintenance, clothing and footwear, and healthcare,” the economist adds.

CSP data also indicate marked regional differences in household consumption expenditure. Residents of the Riga region spent the most, with average expenditure reaching 750 euros per month per person, while the lowest levels were in Latgale, at 446 euros per month. The type of residence also significantly influenced spending levels; namely, in Riga, the average monthly expenditure per capita reached 781 euros, in other towns 657 euros, while in rural areas it was significantly lower at 524 euros per month.

In the economist’s estimation, the growth of household expenditure in the coming years is likely to be more moderate than before, as inflation has fallen significantly. Due to the increase in global energy prices, inflation this year is forecast to be moderately elevated at around 4%, but over the next couple of years, inflation of only about 2.2-2.3% is expected. At the same time, wage growth and the resilience of the labour market will maintain the ability of households to sustain a relatively stable level of consumption. The increase in average wages will gradually decrease both this year and over the next couple of years, from 7.8% last year to a projected 5.4% in 2028, which will still be a higher increase than the forecasted inflation. Accordingly, under current projections, average consumption expenditure could reach more than 700 euros per month per capita by 2028.