According to Bank of Latvia data, at the end of 2025 there were 12.1 billion euros in the bank accounts of Latvia’s residents, and that sum continues to grow. Data on cash are not available, but it is obvious that several million more are kept in “paper money”.
“Keeping money in an account or in cash is usual and understandable, but over the past ten years total inflation in Latvia has reached 56%, which means that in April 2016 you could buy almost twice as much for 100 euros as you can today. Funds that have simply sat in an account all this time have imperceptibly lost more than half their real value,” explains Oļegs Andrejevs, head of savings, investment and pension offerings at SEB bank.
Inflation in Latvia across different consumption groups (April 2016 to April 2026)1:
● Dentistry – +123.4% (100 € → 223.40 €)
● Outpatient care services – +104.2% (100 € → 204.20 €)
● Utilities (water supply, etc.) – +80.6% (100 € → 180.60 €)
● Electricity, gas and other fuels – +78.2% (100 € → 178.20 €)
● Running a personal vehicle – +75.4% (100 € → 175.40 €)
● Housing, water supply, energy (overall) – +72.1% (100 € → 172.10 €)
● Food products and drinks – +71.7% (100 € → 171.70 €)
● Restaurants and cafés – +66.4% (100 € → 166.40 €)
● Health care (overall) – +53.8% (100 € → 153.80 €)
● Higher education – +52.8% (100 € → 152.80 €)
● Other education – +50.2% (100 € → 150.20 €)
● Non-food goods – +45.2% (100 € → 145.20 €)
● Freight transport – +170.4% (100 € → 270.40 €) – a record increase
Latvia and the EU: ten years of inflation
If inflation in Latvia is analysed against the EU, it is clear that 2022 was the most critical year: because of the energy crisis and the war in Ukraine inflation reached 17.3%, almost twice the EU average (9.2%). The Baltic states had some of the highest figures in the whole EU, caused by dependence on imported energy and the large share of the open economy.
According to Eurostat and CSB data:
|
Year |
Latvia |
EU average |
What happened? |
|
2016 |
0,1% |
~1,1% |
A stable period, low inflation |
|
2017 |
2,9% |
~1,5% |
Higher in Latvia than the EU average |
|
2018 |
2,5% |
~1,7% |
A moderate rise in prices |
|
2019 |
2,8% |
~1,4% |
Again higher in Latvia than the EU average |
|
2020 |
0,2% |
~0,7% |
The pandemic: inflation close to zero |
|
2021 |
3,3% |
2,9% |
The rise begins: supply chains |
|
2022 |
17,3% |
9,2% |
The energy crisis. The peak |
|
2023 |
8,9% |
6,4% |
Falling, but still high |
|
2024 |
1,3% |
2,6% |
A return to normal |
|
2025 |
3,7% |
~2,2% |
A little more than the EU |
“In practice that means that although the volume of savings (12.1 billion euros in accounts) is large and continues to grow every year, the purchasing power of those funds is falling rapidly. So thinking “I will put money aside for old age and then simply spend it” is a mistaken strategy. Inflation will eat it sooner, and you will not even manage to “enjoy” your savings,” the expert explains.
At the same time doubts about the reliability of the banking system remain alive among Latvia’s residents, together with a lack of faith in investment: the 1990s and the Soviet legacy, in the form of a lack of understanding of financial instruments, will not let themselves be forgotten. As a result 83% of Latvia’s residents do not invest in financial instruments, apart from pension and insurance products. And 22% of residents have no financial safety cushion even for three months*.
SEB’s savings and investment expert stresses: “A kind of vicious circle forms: those who already invest are better able to protect their savings from inflation and to build capital gradually, while the rest are forced to watch inflation reduce the value of their savings. Of course, there has to be a safety cushion, and it has to be quickly available for unforeseen situations. Usually it is enough for it to cover 3 to 6 months of expenses. But the remaining free funds can work more effectively, for example by being invested regularly. Such an approach is in fact saving, only with a greater potential return. It should be borne in mind that investing always involves a certain risk, but automated solutions are also available nowadays which allow small sums to be invested regularly and over the long term, thereby evening out risk and making investing accessible to a wider circle of people. It is important to understand that investing is not only a way to become wealthier but a practical step towards preserving the purchasing power of savings.”
For those who understand the destructive power of inflation and want to protect their savings, an Investors’ Festival is being organised, which will take place on 6 June. “Together with SEB bank we are giving new investors the chance to visit a free stage. Community, the exchange of experience and the chance to discuss your fears and doubts openly, as well as first steps and various options for preserving savings, are very important. That is exactly why the festival helps people take the first step, and the most important thing is meeting like-minded people,” explains Inta Buša, organiser of the Investors’ Festival.
About the Investors’ Festival:
On 6 June, in the VEF Kvartāls quarter, the Investors’ Festival 2026 will take place. Financial experts, entrepreneurs and investors will discuss on three stages, the main stage, the technology stage and the new investors’ stage, how to preserve what has already been earned and how to grow capital. A free stage is planned for beginners together with SEB bank www.investorufestivals.lv
* Data from a survey by SEB bank and Norstat. The survey was carried out in February this year and involved 1,008 residents aged between 18 and 74.