Latvia’s inflation rate slowed to 3.8% in November 2025, marking the lowest level in four months and signaling welcome relief as price growth moderates. The figure eased from 4.3% in October, representing a meaningful decline that reflects broader price stabilization across the Baltic nation. This cooling of inflation pressures comes amid tighter monetary policy and moderating global energy costs.
Latvia’s annual inflation dropped to 3.8% in November, the lowest reading since July 2025
The decline represents a 0.5 percentage point decrease from October’s 4.3% rate
On a monthly basis, consumer prices fell 0.3% in November, reversing October’s 0.4% increase
The European Commission forecasts Latvia’s 2025 inflation at 3.6%, down from earlier projections
What’s Driving the Inflation Slowdown?
The moderation in Latvia’s price growth reflects slower pace of food and energy costs, which have been primary drivers of inflation throughout 2025. Earlier in the year, these categories contributed significantly to higher readings, but supply stabilization and moderating commodity prices now ease pressures across households.
Monthly price declines in November provided concrete evidence of this cooling trend. The 0.3% monthly decrease marks a sharp reversal from the previous month’s pattern and indicates that inflation momentum has genuinely shifted. This suggests the Central Statistical Bureau’s data captures true underlying stabilization rather than temporary fluctuations.
How Does Latvia Compare to the Eurozone?
Metric
Value
Time Period
Latvia Inflation Rate
3.8%
November 2025
October 2025 Rate
4.3%
Prior Month
2025 Projected Average
3.6%
Full Year Estimate
Monthly Change
-0.3%
November M-o-M
What Does Price Stabilization Mean for Consumers?
Latvia’s economy demonstrated encouraging signs of stabilization in early 2025, with inflation largely brought under control. This latest reading reinforces that trend and points toward more predictable price environments for households that have faced elevated costs throughout much of the year.
Lower inflation rates reduce pressures on purchasing power, though current 3.8% annual gains still exceed the European Central Bank’s 2% target. Consumer real incomes benefit from slower price growth, particularly as wage growth has kept pace with cost increases in certain sectors.
What’s Ahead for Latvia’s Inflation Outlook?
The European Commission’s forecasts suggest inflation will continue moderating through 2026 and beyond. The latest projections estimate inflation falling to 2.2% in 2026 and holding at 2.4% in 2027, aligning much closer with the ECB’s price stability target.
These forward-looking estimates assume continued moderation in food and energy costs alongside tighter monetary policy conditions maintained by the European Central Bank. If global energy markets remain stable and commodity prices hold their current ranges, Latvia’s inflation path looks well-positioned to normalize.
Will Latvia’s Price Growth Continue Easing in the Months Ahead?
The transition from 4.3% to 3.8% signals genuine disinflation momentum, but sustained progress toward the 2% target requires continuation of favorable conditions. Key factors to monitor include global energy dynamics, food supply developments, and services inflation, which has proven stickier than goods prices in many economies.
December and January data will prove critical in determining whether November’s decline represents the beginning of a sustained downtrend or merely one strong month within a broader range. If similar moderation emerges in year-end readings, confidence will solidify that Latvia’s inflation challenge is genuinely receding.
Sources
Trading Economics – Latvia inflation data and analysis
RTTNews – Latvia consumer price inflation reporting
European Commission – Economic forecasts and projections
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